The day I met Byju Raveendran and Byju's

This is one of the toughest articles for me to write. The reason, Byju Raveendran has been my teacher.

2012. I was looking for a coaching institute for MBA prep.

I had a full-time job, and I needed someone to tell me the exact formula to crack the CAT without breaking much of a sweat.

I Googled and found the usual options - TIME and Career launcher ranking high.

I already had taken the trial classes from TIME and CL and found them very run-of-the-mill.

Too much focus on rote learning, which wasn't my strong suit.

But they were touted as the best for MBA coaching.

I was in a fix.

Then I found Byju’s. Good reviews. But a rather odd name.

Maybe Byju stands for something else. I thought.

The location wasn’t far from where I was staying.

They had trial classes.

Before making the final decision, I decided to check them.

The time was 9 AM on a Saturday when I got there.

But it took me some time to understand that the coaching setup was in the basement of a school, closer to a residential area.

Unlike TIME and CL, which were proper coaching classes in the Sec-22 market, Noida.

After asking the lone guard sitting at the school gate multiple times that Byju’s coaching was indeed inside the school, I went inside and met a young Sardarji in proper formal clothes with tie and all. No suit.

He was standing at the entry of the basement.

I told him my reason for being there. He only smiled and noted my details in a notebook.

He then said there is no trial class per see.

It’s their usual class that is going on for a batch of 15 students. Will go on for 3-4 hours.

I can attend it.

I calculated. From 9 to 1:30 PM with a 30-minute break.

It was going to be a long trial class, but I had nowhere to go except that I hadn’t had my breakfast.

Actually, I had thought that it would be a 30-minute class, and then I could come back and have breakfast at my PG.

I thought it would be like TIME's trial class. 25 minutes long. There the teacher came and sold TIME rather than focusing on the subject.

I asked Sardarji when the teacher would arrive so that I could go and get some breakfast if in case he was getting late.

He smiled again and took me inside.

There was a projector machine on a table in the middle of the basement.

The screen was a plain white cloth with few stains on it.

And on that screen was a dais with a mic. No one was there yet, but I could hear sounds. A lot of people were murmuring, like in a railway station.

And then the camera turned, and I saw a jam-packed auditorium with students.

"This is a live class in Bengaluru happening right now," Sardarji said.

"Who is the teacher?" I asked.

"Byju Raveendran."

"Who?"

"Byju Raveendran, the owner of Byju’s."

"Ohhh…" that's why the name was Byju’s.

Byju finally appeared on the screen—a gentle smile and a confident posture that made me believe that he knew his craft.

But the magic happened when Byju started teaching.

The classes were heavy, but Byju had a different way of deconstructing the CAT questions into patterns. He was teaching how to identify these patterns and solve questions faster.

Since CAT and most MBA exams are MCQs, he made me visualize the whole problem and taught me tips and hacks to find answers quickly by reverse engineering.

It was a novel way of learning for me.

But what attracted me was the fee structure.

Time and Career launcher were selling their coaching programs for 30k.

Byju’s was 15k.

I asked why, and Sardar Ji said that since there is no classroom teacher except one guy who will be there to solve doubts, the overheads are very low for Byju’s. Hence low fees.

?? That was the day I met Byju and his baby Byju's.

And I realized two things.

1. Byju was a good teacher

2. But he was a better entrepreneur. He recognized a gap in the market and was using tech to fill it.

Cut to 2023, Byju’s is India's most valuable startup - a $22 billion valuation.

Not sure about Byju Raveendran, but it is not the same BYJU’s that I met in 2012.

A lot of things have changed, and some are for the worse...

The Beginning

Once upon a time, there was a young man named Byju Raveendran. He was a brilliant student who achieved a perfect score on the Common Admission Test (CAT).

But instead of enrolling in an IIM and pursuing a traditional career path, he had a dream of creating an online tutoring company.

With the help of some wealthy investors, Byju's company quickly became a success story beyond his wildest dreams.

It reached unicorn status, meaning that its valuation surpassed $1 billion. And in just two years, it became a decacorn with a valuation exceeding $10 billion.

It seemed like nothing could go wrong.

But then, disaster struck.

A terrible pandemic swept the world, forcing schools to close and students to stay home.

Byju saw an opportunity and made its learning app content free to all students.

It also implemented live classes to boost student engagement, and it worked like magic.

The company's user base grew exponentially, and it became a household name in India and beyond.

But when schools started reopening, and the global economy faltered, demand for Byju's services began to fade.

Then, former employees and industry experts started speaking out against the company's practices.

They accused Byju's of using aggressive selling tactics, delaying cancellation requests, and refusing to give refunds.

The final straw came when Byju's unveiled football star Lionel Messi as its brand ambassador.

It did this just after announcing a plan to lay off 2,500 employees. People were outraged, and criticism flooded social media platforms.

Now Byju's is facing a dark fairy tale.

Its creditors are worried about its ability to repay, and many have sold down their loans.

The company is seeking easier terms on a $1.2 billion loan, but some lenders have asked it to repay part of the loan.

And to make matters worse, regulatory pressure is mounting.

It seems that Byju's fairy tale ending has turned into a nightmare.

The once-great company is struggling, and it's unclear whether it will ever be able to regain its former glory.

Today Byju's is facing a

1. Truncated fundraising
2. Regulatory pressure
3. A very-delayed filing of audited financial statements that disclosed a 13X jump to INR 4,588 crore, in losses for the year ended March 2021.

How Bad is it?

Byju’s fired 2,500 in 2022 and promised no more layoffs.

It's a dark tale of deceit and broken promises.

Byju's, a once-promising online tutoring company, has become a nightmare for its employees.

In Oct 2022, they fired 2,500 employees with the assurance that there would be no more layoffs.

But in February 2023, they fired another 1,200 workers, with HR executives urging them to resign rather than being laid off.

As per sources, to make matters worse, Byju's has refused to offer a severance package to those who lost their jobs.

The company is also trying to raise funds through an IPO of Aakash Educational Services, but there is a problem.

Sources says, BYJU's acquisition of Aakash for nearly $1 billion is still incomplete.

Byju's has also failed to pay many of its vendors for months.

According to Morning Context, "Some of the payments are due since March and there is trouble with their clearance. In the eight months to October 2022, cumulative dues to vendors have crossed Rs 90 crore".

In Oct'22, Byju's said it is planning to be profitable by Mar'23.

We are in March.

Now sources says BYJU's will not be able to meet its March 2023 deadline to achieve group-level profitability.

On top of it all, the company's financial results for the current fiscal year are delayed again, leaving everyone in the dark about the true state of the company's finances.

Byju's has become a nightmare for its employees, investors, and vendors alike, with no end in sight to the company's troubles.

Mis-Selling to parents and harassment.

In 2012, the Byju's I met, promised to provide quality education at lowcost using tech.

2023, the goal is different.

Context reported a story of Rakesh Kumar, who was playing with his daughter at a park one evening in September when two smartly dressed salesmen approached the carpenter and father-of-three.

The men said they worked for Byju's, an Indian education technology company that offers online classes, and pitched a Rs 36,000 ($435) tuition course for Kumar's 11-year-old daughter, saying it would be her golden ticket to success.

Initially intrigued, Kumar allowed the men into his home, where they quizzed his child for two hours, and said she was academically "weak", and pressured him into buy the course.

At first, he refused as the cost seemed unaffordable with his monthly salary of about 20,000 rupees working at a woodshop.

"But then they said things like 'Your daughter will end up poor like you' and 'You should be ashamed for trying to stop her from succeeding in life'," the 41-year-old said at his workplace in the city of Faridabad, located on the outskirts of Delhi.

"I finally caved and ... made the worst decision of my life," Kumar told Context.

"We are in a financial mess," he said, adding that he had borrowed money from his brother-in-law in October and was not sure when or how he would be able to pay him back.

In Kumar's case, one of the Bjyu's salesmen told him he could get a refund of his 7,000-rupee down payment within the 15-day trial period.

The other salesman took his phone and identity cards to sign him up for a loan without his consent - which he only realised later when he started receiving reminder text messages from a third-party finance firm about an upcoming monthly installment.

Kumar said he thought he was only signing up for Byju's course, not a loan.

"The next day I changed my mind," he said.

"I knew I didn't have that kind of money. I'm just a labourer, with four people to feed at home ... I called the (salesmen) to get my refund. But they disappeared."

Since early October, 4,000 rupees have been deducted from Kumar's bank account in monthly payments to Byju's. He has visited a Byju's centre a dozen times to try to cancel his course, but said he is still being charged despite being told by various employees that the cancellation process was underway.

Kumar said his brother-in-law has filed a police complaint against Byju's but that no action had been taken so far.

"It is just loss after loss with no help in sight," he said.

Kumar's experience with Bjyu's is not unique - scores of Indian consumers have been airing similar grievances online.

Twenty-two Byju's customers, several from low-income homes, told Context how they had been aggressively targeted by salespeople, with some coerced into paying for courses, tricked into taking out loans and ultimately left out of pocket.

Most were parents who said Byju's staff took advantage of a desire to provide the best education for their children, and encroached on their privacy by ambushing them in public, pressuring them at home, or secretly collecting their data.

Many clients recounted how they had called Byju's customer support to cancel their subscription during the trial period, only to later find their requests had never been registered and that the refund eligibility period had ultimately lapsed.

Ranjana Sharma, who said she was "defrauded" by Byju's and owed a refund of more than 60,000 rupees, said the firm got in touch after she complained on Twitter and returned her money.

"They mentally harassed me," she said by phone from the northern city of Amritsar. "Not only did they humiliate and shame us, they surreptitiously put me on a loan scheme, and registered two fake students under my number.

"I went to the police, wrote to the government, the central bank ... I did everything, but finally went on Twitter," Sharma added. "That was the only thing that helped."

Byju's did not respond to requests for comment on her case.

Digambar Singh says he has been chasing Byju's, an online tutoring firm and the world's highest-valued edtech start-up, for a refund for months now.

Mr Singh, an accountant, says he paid 5,000 rupees (￡48; $66) up front and borrowed an additional 35,000 rupees - a loan he claims was facilitated by Byju's - to buy a two-year math and science programme for his son.

"A sales representative came to my home and asked my son all kinds of difficult questions which he couldn't answer," Mr Singh said. "We were completely demotivated after their visit."

He told the BBC he felt shamed into buying the course. But he claims he didn't get the services he was promised - including face-to-face coaching, and a counsellor who would call and update him on his son's progress - and that after the initial months Byju's stopped answering his calls.

ConsumerComplaints.in, an independent website, has 3,759 complaints raised against Byju's - with 1,397 resolved and 2,362 unresolved cases. These grievances include cancellation delays, issues with obtaining refunds, and aggressive marketing tactics.

By comparison, the website shows fewer than 350 complaints apiece against other major edtech firms including Simplilearn, Vedantu, Unacademy, and the now-bankrupt Lido Learning.

Byju's denied any wrongdoing

Byju's employees are not happy either

Pratik Makhija, a former Byju’s salesman who had two spells with the company, said he had endured “daily mental torture”. The 27-year-old said this included his manager shouting at him, forcing him to work seven days in a row, and pitting colleagues against each other.

“You feel like you’re in a bubble or trapped at the bottom of a well, with no way to climb out and enjoy the outside world. There is no work-life balance. Zero,” said Makhija, who first quit Byju’s in January 2021 after 18 months there. “We are treated like slaves. At what cost are they making their revenue, their valuation? By crushing us,” he added.

Makhija said he rejoined Byju’s in July because he needed the money but was suspended in August—for a month—after he complained about aggressive behaviour by his managers. He quit again in October but said he is still “haunted” by the actions of his managers, who he says shouted at and manhandled him. “It got so bad that I had to seek professional help, and eventually got diagnosed with anxiety,” said Makhija, who is now unemployed and looking for a job. “I get terrible flashbacks.”

Byju's staff told Context they increasingly fear for their jobs, and feel pressured to work even harder as colleagues are laid off. According to the 26 workers interviewed, most of whom spoke on the condition of anonymity due to fear of reprisals, they are often expected to work at least 12-hour shifts six days a week.

Employees said they are regularly expected to work beyond 12 hours a day—sometimes for seven days a week—without any additional pay, and that they have to accept the extra hours and shifts for fear of losing their jobs.

Most employees describe work as an endless grind to meet weekly sales targets of at least Rs.1,00,000, which means selling between one or four courses depending on their value. To do so, salespeople not only spend hours on the phone each day but frequent places including schools, malls, and temples to persuade people to sign up, often low-income workers—from market sellers to tuk-tuk drivers—who are not digitally savvy.

“You have to let go of your conscience and be absolutely shameless to do this job,” said a former salesperson who quit in September, speaking on condition of anonymity. “I (was) so wracked with guilt sometimes, I could barely sleep at night,” she said, recounting times when she had barged into people’s homes, shamed them into buying a course for their children, and blocked their numbers if they asked for refunds.

Makhija said Byju’s did not train employees on how to make sales, but expected them to close deals by any means necessary. “It doesn’t matter how you do it - do unethical things, promise fake things, make false commitments, mislead, misguide,” he said. “Do whatever you have to do to make a sale. We want revenue at the end of the day - that’s their message to us.”

On their one day off a week, Byju’s workers say they are bombarded by emails and messages from their managers, many of which were seen by Context.

In a WhatsApp group, one manager questioned attitudes among her team of salespeople and said “trust that I will make you suffer like hell under me” as she threatened to mark them as absent, cut their day’s pay, and place them on performance improvement programs (PIP) if they did not meet their targets.

“Don’t drop me any kind of message stating you people are not well ... So do not think of even asking for any such kind of leave,” the manager said in a following message. “You wanna tag HR, go ahead.”

Many employees said that failing to meet targets means they are not allowed to take lunch breaks, while five recalled how they had been physically stopped from leaving work - with managers locking their bags away or holding them by their arms.

All of the workers said it is nearly impossible to take any kind of leave including their entitled one sick day a month. They said they also rarely get any bank holidays, and almost never take any annual leave because requests are never approved.

One Bengaluru-based employee said her manager did not let her go to see her ill mother after she was hospitalised in Mumbai in August. “He said: ‘You get paid to work, not to go on trips’ as if I was going on a vacation,” she said. “We are treated like animals ..."

Another employee said, “...Byju’s is not a firm, it’s a jail...”

Nearly half of the Byju’s employees interviewed by Context said they came from low-income households and were the first in their families to go to university. They said they want to provide a better life for their relatives with their education, and stressed that it is one of the main reasons they tolerate abuses at the company. Many also feel trapped because they desperately need their monthly salary to pay off various bills and debts.

Nitesh Kumar, a former Byju’s salesman, quit as part of a mass resignation of at least 40 employees, saying he had been mistreated in various ways in two separate stints. The first time, the 26-year-old said he was forced to quit by the company after he fractured his leg in a road accident. After rejoining, Kumar said he had been subjected to 15-hour work shifts, denied lunch breaks, had his pay cut, and ordered to work when ill because he had not met his sales targets.

Given that even Byju's basic courses start at around $50 - unaffordable to most Indians - the company often pushed its product irrespective of whether the child needed it or the family could afford it, a former employee said.

"It does not matter if he is a farmer, a rickshaw puller. The same product is sold for a range [of prices]. If we see that a parent cannot afford it, we charge them the lowest price in that range," Nitish Roy, a former business development associate at Byju's, told the BBC.

But Mr Roy, who now teaches orphans in a school in Mumbai city, says he left Byju's earlier this year after a two-month stint because he was deeply uncomfortable with how the company operated.

"It started as a noble concept but has now become a revenue-generating machine," he added.

One sales executive said he developed anxiety, and his blood pressure and sugar shot up during the year he worked at Byju's.

Several employees said 12-15 hour work days were a regular feature of their job, and staff who couldn't clock 120 minutes of "talk-time" with potential customers were marked absent, resulting in loss of pay for that day.

"That would happen to me at least twice a week. I'd have to make at least 200 calls a day to be able to hit the target," a former employee said.

He added that the target was incredibly difficult to meet because he would be given few leads to chase and an average call would often last less than two minutes.

Byju’s said it had a robust mechanism for such complaints, and that it did not set “irrational targets” for its workers.

What could be the solution??

Here, I'd like to applaud China.

In 2021, China mandated that all ed-tech companies and after-school tutoring services must operate on a not-for-profit basis and be registered as nonprofit entities.

Why?

After-school tutoring is seen as an important component in the education of Indian students, particularly because public exams are highly competitive.

When excessive VC money gets into education, then After-school tutoring services like Byju's usually charge high fees, which bring excessive financial burdens to the students and their families.

With the rise of ed-tech in India, it is important to take note of the potential downsides, such as excessive fees and financial burdens, and consider implementing similar policies to ensure that the sector operates with greater scrutiny and oversight.

By taking action now, we can ensure that the benefits of ed-tech are enjoyed by all, without leaving anyone behind.

??I have a FREE newsletter where I share tips on storytelling and what I'm learning while building my solo business. Join here: https://ankit-uttam09.systeme.io/1f65ea4a

Sources:

1.??https://frontline.thehindu.com/news/investigation-byjus-staff-reveal-harsh-work-conditions-indian-parents-say-edtech-giant-pushed-them-into-debt/article66274546.ece

2.??https://www.bbc.com/news/world-asia-india-58951449

3.??https://economictimes.indiatimes.com/tech/startups/loss-after-loss-parents-say-byjus-pushed-them-into-debt/articleshow/96222272.cms?from=mdr

4.??https://www.businessinsider.in/business/news/byjus-to-miss-march-2023-deadline-for-group-level-profitability-results-delayed-again/articleshow/97650755.cms

5.??https://www.newsbytesapp.com/news/business/byju-s-fires-employees-again-over-1-000-laid-off/story

6.??https://economictimes.indiatimes.com/tech/startups/most-valuable-indian-startup-byjus-is-said-to-seek-easier-terms-on-1-2-billion-loan/articleshow/96053438.cms