There is a very thin line between greed and ambition. With positive desire and determination, ambition can take you to the heights of business success with sky being the limit. But the greed to dominate the market can drown you in the trenches of deep oceans. That’s what seems to have happened with BYJU’s, an Indian multinational educational technology company.
In greed to become the biggest edu-tech company in the world, BYJU’s acquired dozens of companies during covid and post-covid times. They anticipated that due to the complete lockdown and online education programs, the education market will now completely shift to virtual mode. The early forecast of the company’s strategist proved to be wrong after the ease of lockdown restrictions. As the pandemic wave eased, almost every business returned back to the normal offline mode and the same happened with education sector. Consequently, the money dried up in buyouts and the shifting of business to offline mode limited the company’s resources of revenue. The situation has become so critical that BYJU’s is now struggling to fulfill its payment promises and in an effort to increase sales it is fooling poor Indians.
Fraud with Poor Indians
Reports suggest that BYJU’s company management has resorted to fraud in an effort to sell its online educational products. First, they target the lower and middle-class parents who would do anything to make lives of their children better. The salesman of the company lures parents with a dreamy future for their children and makes them ready for the loan process. Poor and illiterate parents unaware of the EMIs and interest process agree to take loans. As they realize the recurring cost of the purchase, the damage has already been done. They block the parent’s number and move on to the next target. This online Ponzi scheme has destroyed many poor families. In love with their children, they get entangled in a costly BYJU’s course and find themselves in deep debt.
Once the flag-bearer of Indian startups, how BYJU’s reached such a glaring situation? Before the pandemic, the company was steadily moving towards the success of new heights. But, greed to monopolize the edutech market of the world ended up as a disaster. During the pandemic times they acquired dozens of companies like WhiteHat Jr, LabInApp, Scholr, HashLearn, Aakash Institute, Great Learning, GradeUp, US based Tynker and Australia based GeoGebra. In a zeal to dominate although they acquired the company but now they do not have money for payment of these costly buyouts.
BYJU’s company made a deal to buy Akash Educational Services Limited at $950 million in cash and stock payments. The deal is said to be one of the largest buyouts by any start-up. But, the unicorn edutech company constantly defaulted on its promised payments and now has increased its payment timeline to September.
Moreover, BYJU’s has still not filed the mandated financial statements and annual returns for the financial year 2020-21. The Companies Act 2013 requires every company to conduct an audit of its financial accounts and submit it to Ministry of Corporate Affairs. According to the MCA, the filing should not be delayed for more than seven months.
As investments in startups are decreasing, companies are finding it very difficult to manage their initial extravagant spending. Similarly, the initial spending of BYJU’s had already dried up their revenues, the low subscriber base further aggravated the financial conditions. In an effort to gain market share they resorted to unethical selling practices and started to loot poor people. They are yet to declare bankruptcy but they are already morally bankrupt.
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