The pain of converting a startup to a valuable business is unimaginable. An ordinary engineer from a small village in Kerala created the world’s most valuable EdTech startup, his name is Byju Raveendran, the man who gave birth to Byju's App.
Biju's App was the most famous E-learning App in the entire world, Byju Raveendran introduced a few marketing strategies into his business, and he made many celebrities as his brand ambassador including Bollywood superstar Shah Rukh Khan and soccer legend Lionel Messi, he didn’t stop there Byju’s become the lead sponsor of the Indian cricket team.
The COVID-19 pandemic gave Byju’s a leap into the market, during COVID-19 everything became online and so did education. The COVID era became the catalyst for the growth of Byju's App.
but in a glimpse of an eye, it became the most disastrous startup.
What are the factors that led to the fall of the World’s most valuable EdTech? We check one by one.
The junkyard
During the Covid era, Byju started accruing many small startups which could be a threat to his EdTech business. He spent around 3 billion $ for acquiring the startups globally It made Byju's the junkyard of Ed-Tech Apps.
The result was a disaster
Just 2years ago, the startup was worth $22 billion(2022). Now one of its main investors has cut Byju’s valuation to under $1 billion. Prosus NV — as well as two other early backers, Peak XV and the Chan Zuckerberg Initiative — have quit Edutech’s board. Creditors have taken control of Byju’s Alpha, a US financing vehicle, over an unpaid $1.2 billion term loan.
Hence Byju’s started a huge layoff and Kerala govt. tried to help Byju but they failed to help him to get out of the huge liability.
The Big Lie
Another reason why the app failed was due to its inability to provide sufficient results as promised by Byju's to its users. Most users felt that the app did not provide enough benefit to their children and did not significantly contribute to their knowledge improvement, leading them to cancel their subscriptions. the people lost their trust in Biju's.
The Caterpillar
Biju's spent huge amount of money on new user acquisition instead of improving the service and gaining new users through the mouth of the existing users. The Customer Acquisition Cost (CAC)of Byju’s App is estimated between INR 2,000 to INR 5,000. The average CAC of other apps is only below INR 500-1000. the money is eaten by the marketing department as a leaf-eating caterpillar
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