Once celebrated as India’s most valuable startup, Byju’s has entered a dramatic phase of financial collapse. Amid bankruptcy proceedings in a Delaware court, the edtech giant has sold two of its high-profile U.S. acquisitions: Epic! and Tynker, for a combined $97.2 million (Rs. 831 Crores), a fraction of the nearly $700 million (Rs. 5987 Crores) it originally paid. These distressed sales mark a sharp turn from Byju’s pandemic-fueled expansion to its present-day disintegration.
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Byju’s, the Bengaluru-based edtech titan, once valued at $22 billion (Rs. 1,88,164 Crores), is unravelling at a stunning pace. The company’s global buying spree, which peaked during the COVID-19 pandemic, has now culminated in a desperate scramble to offload assets amid mounting legal and financial pressure in the United States.
On May 30, CodeHS, a Chicago-based coding education company, confirmed its acquisition of Tynker, a children’s coding platform, for a mere $2.2 million (Approximately Rs. 19 Crores) in cash. This is a dramatic markdown from the nearly $200 million (Rs. 1711 Crores) Byju’s paid in 2021. The same bankruptcy court-supervised process also approved the sale of Epic!, a digital reading platform, to TAL Education Group, a Chinese education giant, for $95 million, well below its 2021 purchase price of $500 million.
Judge Brendan Shannon of the Delaware Bankruptcy Court oversaw both auctions. These sales aim to recover a portion of the $1.2 billion term loan Byju’s raised from U.S. lenders via a vehicle named Byju’s Alpha. But the gap between acquisition and sale prices highlights just how precipitous Byju’s downfall has been.
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Bankruptcy, Lawsuits, and CFIUS Scrutiny
The U.S. Department of Justice closely monitored the Epic! sale over concerns related to foreign ownership. According to court documents, the transaction was nearly derailed due to CFIUS (Committee on Foreign Investment in the United States) scrutiny, a national security watchdog that examines foreign investments in American companies.
Described as a last-minute “fire drill” in filings, the TAL acquisition proceeded only after additional clarifications, further underscoring the regulatory minefield Byju’s is now navigating. The broader bankruptcy proceedings are entangled in lawsuits accusing the company of fraudulent asset transfers, director misconduct, and diversion of loan proceeds.
These issues stem from Byju’s alleged misuse of the $1.2 billion loan secured in 2021, which was meant to power international growth but is now under investigation for irregularities. The Delaware court’s liquidation of assets is a critical step in clawing back lender funds, but it’s unlikely to close the chasm of debt and reputational damage left in the wake.
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EdTech Bubble Burst: Byju’s Collapse and Its Fallout
Byju’s story has become a cautionary tale of pandemic-era exuberance colliding with post-pandemic market realities. At the height of its dominance, the company aggressively acquired multiple companies, including:
- Osmo ($120 million, 2019) – Edutainment for early learners
- Tynker (~$200 million, 2021) – K-12 coding platform
- Epic! ($500 million, 2021) – Children’s digital reading service
- Aakash Institute ($1 billion, 2021) – India’s leading test-prep chain
Today, many of these units are either underperforming, up for auction, or mired in litigation. Osmo is reportedly still looking for buyers.
Byju’s downfall has also spooked investors. Major backers such as Prosus, Sequoia Capital, and Blackstone have either marked down their investments or exited. In India, the company faces insolvency proceedings and enforcement actions from the Ministry of Corporate Affairs.
What was once the poster child for India’s edtech revolution now faces an uncertain future, one that may unfold entirely within courtrooms and creditor meetings.
About the author – Prakriti Jha is a student at National Forensic Sciences University, Gandhinagar, currently pursuing B.Sc. LL.B (Hons.) with a keen interest in the intersection of law and data science. She is passionate about exploring how legal frameworks adapt to the evolving challenges of technology and justice.