₹100 Crore Loan Regret at Byju’s: Byju’s, once celebrated as India’s most valuable startup, is now navigating turbulent financial waters, with its founder and CEO Byju Raveendran openly expressing regret over a pivotal decision that may have intensified the company’s challenges. The company, which once boasted a valuation of $22 billion, is now mired in legal disputes, investor conflicts, and debt repayment difficulties stemming largely from a $1.2 billion loan it secured in 2021.
Speaking publicly in 2025, Raveendran referred to the loan as a “mistake” and criticized what he described as “vulture lenders” for exacerbating Byju’s financial crisis. In an environment where startups are scrutinized for their governance and spending habits, this revelation has sparked fresh debate about startup funding, financial oversight, and ethical lending practices.
₹100 Crore Loan Regret at Byju’s
| Key Element | Details |
|---|---|
| Loan Amount | $1.2 billion (approx. ₹100 crore at time of disbursement) |
| Purpose of Loan | International expansion and acquisitions |
| Loan Type | Term Loan B (TLB) |
| CEO’s View | Called it a “mistake” and labeled some lenders as “vulture lenders” |
| Company Valuation Peak | $22 billion |
| Current Situation | Facing insolvency petitions, staff layoffs, and legal battles |
| CEO’s Pledge | Will repay lenders before drawing any salary or personal compensation |
| Official Statement Source | Economic Times |
Byju’s rise and fall—from a $22 billion valuation to financial crisis—is both inspiring and instructive. While the company disrupted traditional education and brought millions online, its aggressive expansion strategy fueled by risky debt has backfired.
Yet, Raveendran’s public admission of his mistake, and commitment to repaying the debt, shows a degree of accountability rare in startup culture. Whether Byju’s can fully recover remains to be seen, but the lessons it offers to entrepreneurs, investors, and policymakers are already clear.
The Backstory: How the Loan Came to Be
In 2021, Byju’s was riding high on a wave of investor confidence, following rapid acquisitions of edtech companies like Aakash Educational Services and Great Learning. To sustain this momentum and expand globally, the company opted for a $1.2 billion Term Loan B (TLB) from international lenders.
TLB loans are commonly used in Western markets and are typically taken by companies seeking quick capital with flexible repayment structures. However, they often come with aggressive repayment clauses and significant interest liabilities.
According to Raveendran, Byju’s had the option to raise funds via equity at the time, but instead chose debt to avoid dilution of ownership.
“We shouldn’t have taken that loan. There were other options. We underestimated the risk,” he stated during a recent interview.
Who Are the So-Called “Vulture Lenders”?
Raveendran used the term “vulture lenders” to describe certain entities among the loan syndicate who, in his words, exploited Byju’s financial situation. He claimed these lenders were more interested in acquiring the company’s assets than in supporting its turnaround.
This aligns with industry criticism of some global private credit funds that prioritize aggressive recovery methods over restructuring support.
These lenders reportedly:
- Triggered default clauses over technical non-payments
- Initiated legal proceedings in international jurisdictions
- Sought collateral including ownership stakes in Byju’s subsidiaries
Impact on Byju’s Operations and Employees
The fallout from the loan crisis has been severe:
- Mass layoffs: Over 5,000 employees have been let go since 2023.
- Delayed salaries: Reports indicate delays in staff remuneration and vendor payments.
- Legal troubles: Byju’s is facing lawsuits from former investors, partners, and even internal shareholders.
- Investor exits: Early backers like Sequoia Capital and Prosus have either reduced stakes or distanced themselves publicly.
Despite these issues, Raveendran insists that the core learning platforms remain operational, and user engagement in India remains stable.
CEO’s Response and Future Outlook
In an emotional note to stakeholders, Raveendran said:
“We may be broke, but we are not broken. I am committed to rebuilding this company, even if it takes years.”
He has pledged to:
- Avoid drawing any salary until lender dues are cleared
- Focus on core markets like India, dropping expansion plans temporarily
- Rebuild trust with employees, parents, and partners
Byju’s has also hired restructuring experts and legal advisors to manage debt negotiations and streamline operations.
What ₹100 Crore Loan Regret at Byju’s Means for Indian Startups
The Byju’s loan saga is a cautionary tale for high-growth startups, especially in emerging markets like India:
1. Beware of Easy Debt
Loans may seem attractive for fast growth, but they come with repayment obligations that can sink even profitable companies during downturns.
2. Maintain Governance Discipline
Board oversight, audit trails, and investor checks must be prioritized, especially when raising large capital.
3. Communicate Transparently
Founders need to maintain open communication with stakeholders to manage crises more effectively.
Lessons for Lenders and Policymakers
While startups should be cautious, lenders and regulators also have roles to play:
- Lenders must offer flexible restructuring support, especially to companies with long-term potential.
- Regulators should increase scrutiny of cross-border loans and debt instruments marketed to Indian startups.
- SEBI and RBI may need to evaluate guidelines around term loan disclosures and due diligence.
FAQs On ₹100 Crore Loan Regret at Byju’s
Q1. What is Term Loan B (TLB)?
A: A TLB is a high-risk, high-return loan structure, often used by companies in the US and Europe. It involves floating interest rates and can be traded among institutional investors.
Q2. Why didn’t Byju’s raise more equity?
A: Equity would have diluted Raveendran’s ownership. Debt was faster and retained control—but proved riskier.
Q3. Can Byju’s recover from this crisis?
A: It’s possible but challenging. Success will depend on debt restructuring, core product performance, and market sentiment.
Q4. Are other edtech firms facing similar issues?
A: Several edtech startups globally have faced valuation corrections, layoffs, and investor scrutiny in the post-COVID phase.
Q5. Is Raveendran still CEO?
A: Yes, though his leadership is under scrutiny. He has committed to staying on and overseeing the turnaround.
