What Investors Should Learn from the Fall of Edtech Unicorn Byju’s
By Archish Mittal, MBA ’25, and Daniel Pianko
In late February 2024, Indian edtech magnate Byju Raveendran was ousted from his edtech company, Byju’s, in an emergency meeting called by the shareholders. It was the latest domino to fall in a string of calamities for Byju’s, which was once the country’s most valuable startup: The company’s U.S. arm has filed for bankruptcy, Raveendran mortgaged his home to pay the salaries, and in February 2024 a lookout circular was issued against him by India’s draconian money laundering agency, Enforcement Directorate.
Many in the education investing community saw the writing on the wall. The Indian education investment market hit peak hubris when Byju’s spent $40 million to sponsor the 2022 FIFA World Cup shortly after raising over $800 million at a $22 billion valuation from the likes of Chan-Zuckerberg Initiative, Blackrock, and Tiger Global. Spurred in no small part by Byju’s rapid growth, international investors have created a frothy market throughout the country: India touts five edtech unicorns backed by the top brands in global investing.
There’s a reason for all this excitement: India has 190 million online students (second in the world behind China) and edtech spending is growing at 25% (the fastest of any market). As the Indian economy expands under pro-business leadership, private sector spending on education is expected to grow dramatically. But in their rush to build the next Uber or Airbnb in Indian edtech, investors are finding themselves entangled with companies that look more like Theranos or WeWork instead: Consider Unacademy and Cuemath, which have also faced growing skepticism about product efficacy and leadership.
Key takeaways for global investors
It’s worth noting that a similar shakeout of overly aggressive venture investors has hit edtech in the U.S., with notable collapses like Knewton ($52M raised at its peak for Series F). What does the fall of Byju’s mean—not just for the future of the Indian edtech market, but for U.S. and global investors as well?
Skipping copper isn’t easy. In many ways, Byju’s excesses are driven by the belief among some of the world’s top investors that somehow Western capital can unlock a 200 million+ student market (or, for the truly hubristic, a billion-person market, which would never have been possible because there just aren’t that many school-aged people in India). The premise was attractive: Just as the wireless phone displaced the copper wire phone, so too will “Western edtech know-how” leapfrog the dated Indian education system. But while technological innovations may have helped on the margins, they were never going to provide the systemic fix that the “skipping copper” idea promised. As is becoming increasingly clear in the U.S., the most effective edtech doesn’t reshape the system entirely; it enables the system to work better.
The product matters. Indian edtech entrepreneurs have sold the story to investors not on the core product, but on the ability to somehow acquire their way to global greatness. While Byju’s bought over 19 businesses for $3.63bn with cheap VC dollars, the core product was notoriously poorly received. Complaints on Indian messaging boards from parents frustrated with Byju’s software and hardware packaging were easily accessible for any investor engaged in due diligence. But in the case of Indian edtech, it seems that even the world’s most well-known investors forgot to focus on basic product issues.
Remarkably, investors have been so taken by globe-spanning entrepreneurs that they did not observe many standard corporate governance rules such as completed audits and related party transactions. A similar challenge plagued the Indian startup CareerLab, backed by Rocket Internet’s venture capital fund Global Founders Capital, which saw hundreds of students protesting outside its offices for not fulfilling its promise of providing students with lucrative jobs.
Impact requires efficacy. The final, perhaps most insidious, aspect of the Indian edtech implosion is that the founders have all wrapped themselves in swaths of social good and promised investors both in India and around the world that the industry would catapult India’s human capital into the top tier worldwide. But there are no easy fixes to educational attainment; Byju’s device, with some software, does not a scholar make. The work of building educational systems takes time, money, and a close working relationship between parents, teachers, and the governments that pay for most of it. Because they didn’t prove that their products worked before touting their impact, Indian edtech entrepreneurs all but ensured that it was only a matter of time before their failures became apparent.
The lessons that investors learn from the Indian edtech debacle apply around the world. Simply put, it’s past time for a fundamental shift in the global edtech investment community from chasing unicorns to the slow, steady work of proving efficacy. Consider the success of companies like Lynda.com (purchased by LinkedIn for $1.5 billion in 2016), Newsela, or promising early-stage companies like the test-prep program MasteryPrep. They all started slow and focused on proving the effectiveness of their product, offering good services at a demonstrably lower price point than their “analog” competition, and building a stable of referenceable clients and relationships. In many cases, they’re also tools that focus not on directly providing education, but on supporting the work of educators and administrators—with school districts, rather than parents and students, as their ultimate customer. The back-office work is less sexy, but it’s much more valuable—and has yielded higher returns.
The collapse of Byju’s should be a wake-up call to education entrepreneurs not just in India but around the world—particularly the Western investors, many of whom have great intentions, but who misread the signs. In this industry (perhaps more than any others), the quick buck of venture capital will never result in the long-term returns that are possible from the steady, slow building of institutions and software products that serve the vital function of educating individuals. In the years to come, building a truly successful Indian edtech market will mean treating it the same way we are increasingly focusing on the U.S. education system: A focus on true impact, educational attainment, gradual success, and sustainable growth versus overnight triumphs.
About the Authors:
Archish Mittal, MBA ’25, is a student at Cornell University’s Samuel Curtis Johnson Graduate School of Management in the SC Johnson College of Business and a Cornell Emerging Markets Institute Fellow. He has experience working on public-private partnerships at McLarty Associates, International Solar Alliance, and the Massachusetts Institute of Technology Jameel World Education Lab. Mittal serves on the board of advisors of LEO1, a fast-growing fintech company in India focused on education, and serves on the board of directors of Global Dignity, a nonprofit founded by Crown Prince Haakon of Norway. He is a member of the Heidelberg International Club, a Next-Gen Scholar at the Center for High Impact Philanthropy at the University of Pennsylvania, a councillor at the Atlantic Council, and a member of the Young Leaders Circle at the Milken Institute (2022-2023). Mittal holds a BSc in investment and financial risk management from City University, London, and an MA in law and diplomacy from the Fletcher School at Tufts University. He writes regularly for Al Arabiya, Fair Observer, and other global publications.
Daniel Pianko is a managing director at Achieve Partners and was formerly a managing director at University Ventures. With over a decade of experience in the education industry, Pianko has built a reputation as a trusted education adviser and innovator in student finance, medical education, and postsecondary education. A frequent commentator on higher education, Pianko’s insights have been featured in national media outlets including the Wall Street Journal, CNBC, TechCrunch, Inside Higher Ed, and the Chronicle of Higher Education.
Pianko began his career in investment banking at Goldman Sachs, and quickly became intrigued by the potential of leveraging private capital to establish the next generation of socially beneficial education companies. After leaving Goldman, he invested in, founded, advised, or managed a number of education-related businesses that led to the creation of University Ventures. Prior to founding UV, he established a student loan fund, served as chief of staff for the public/private investments in the Philadelphia School District, and worked as a hedge fund analyst. Daniel graduated magna cum laude from Columbia University, and holds a MBA and MA in education from Stanford University.