According to Financial Times News, a US bankruptcy court in Delaware has ordered Byju’s founder Byju Raveendran to pay over $1 billion in what the judge called an “extraordinary” ruling. The decision comes after years of legal battles between what was once India’s biggest startup and its creditors over a $1.2 billion US term loan made in 2021. Judge Brendan Shannon found Raveendran had repeatedly failed to show up for hearings and refused to cooperate with legal discovery efforts, leading to contempt findings and accumulating $10,000 daily penalties. The $1.07 billion relief includes these accumulated penalties, with the judge noting Raveendran lives in Dubai and “apparently has no intention” of paying. Creditors had previously accused Raveendran and his co-founder wife of “masterminding the theft” of $533 million in loan proceeds.
The stunning fall from grace
This is just brutal. Byju’s was once valued at $22 billion and had major backers like BlackRock and Prosus throwing money at them. They went on a global spending spree, sponsored the FIFA World Cup, and seemed unstoppable. Now their founder is facing a billion-dollar judgment he apparently has no intention of paying. What happened?
Following the money trail
Here’s where it gets really interesting. Court documents show that $533 million from that loan ended up with a little-known Miami hedge fund that, get this, had its headquarters registered to a pancake chain. The money then got transferred outside the US via a UK company. A US judge has already ruled this was a “fraudulent transfer.” Basically, it looks like someone was trying to make the money disappear through some creative accounting.
startups”>The bigger picture for startups
This case should scare the hell out of venture capitalists and startup founders everywhere. When the cheap money faucet turned off after the pandemic, Byju’s couldn’t handle it. They’d built this massive edtech empire on easy capital, and when that disappeared, everything started collapsing. The aggressive sales practices, the questionable corporate governance – it was all papered over when the money was flowing. Now the bill has come due, and it’s enormous.
What happens now?
Realistically? Good luck collecting that $1 billion. Raveendran is in Dubai, and international judgment enforcement is notoriously difficult. The company is also tangled up in insolvency proceedings in India over cricket team sponsorships. This feels like the final chapter of a startup story that went completely off the rails. The question isn’t whether Byju’s can recover – it’s whether any pieces will be left for creditors to pick up.
