The Rise of a Startup Hero
Byju Raveendran is founder of Byju’s PTE Ltd. — once celebrated as India’s ed-tech poster child. At its peak, Byju’s was valued at around $22 billion and backed by major global investors such as Tiger Global Management, Prosus N.V. and the Chan Zuckerberg Initiative.
It seemed to symbolise the promise of India’s startup ecosystem: rapid growth, global capital, an emerging digital-education boom.
The Legal Storm in the U.S.
The narrative took a dramatic turn when a U.S. bankruptcy court in Delaware handed a judgment requiring Raveendran to pay over $1.07 billion.
The key facts:
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The ruling stems from the U.S. unit of Byju’s — called “Alpha” in filings — and a $1.2 billion term loan extended in 2021 by a group of U.S. lenders led by GLAS Trust.
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The court found that about $533 million allegedly transferred in 2022 by Alpha had not been recovered.
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Another separate item: a limited-partnership stake later valued at approximately $540.6 million.
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Because the court judged that Raveendran repeatedly ignored court orders, missed deadlines, skipped hearings and provided “evasive, incomplete” responses, it granted a default judgment.
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Judge Brendan Shannon described the circumstances as “unique and unlike anything the undersigned has encountered before, thereby making such relief… richly warranted.”
The Appeal: Refusing to Accept the Fall
Raveendran and his legal team vehemently dispute the court’s findings. Their position:
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They say the court erred by issuing the judgment without giving Raveendran an adequate opportunity to present a defence.
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They argue the funds in question were not used for personal benefit, but rather for the parent company, Think & Learn (Byju’s owner).
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They claim the lenders had awareness of how the funds would be used.
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A statement by their counsel: “We consider that the U.S. Court erred… and will be filing the necessary appeals and other contestations related to this judgment and related orders.”
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They are also preparing claims of their own — potentially at least $2.5 billion in damages against GLAS Trust and others in India and other jurisdictions.
The Broader Picture: From Boom to Crisis
What makes this case more than just a legal drama is how it encapsulates the fall of a once-shining startup.
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Byju’s, at its height, symbolised India’s ambition: a massive valuation, global investors, rapid expansion.
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But it has since faced a funding drought, mass layoffs, multiple lawsuits and an insolvency process in India.
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In India, the company is under court-supervised sale process; bidders like Manipal Education and Medical Group and UpGrad (founded by Ronnie Screwvala) have shown interest.
This U.S. judgment thus serves as both legal reckoning and symbolic blow: the founder of a startup once valued at tens of billions is now facing a massive claw-back order.
What Happens Next
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The court has given the parties seven days to respond to the ruling.
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Raveendran’s team will lodge the appeal, and likely litigate across multiple jurisdictions.
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Meanwhile the sale process in India continues, which could affect how creditors recover value.
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There is also reputational fallout: investors, founders and ecosystem watchers will take note of what happens here.
Why This Matters
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For founders & investors: The case underscores risks around cross-border lending, corporate governance, and the duties of directors/officers in multinational setups.
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For India’s startup ecosystem: It shows vulnerabilities — high valuations don’t immunize companies against legal and financial woes.
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For ed-tech specifically: The sector saw tremendous hype; this is a moment of sobering reality for that wave.
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For legal circles: The use of U.S. bankruptcy proceedings to claw back funds and the question of jurisdiction (which Raveendran had earlier challenged) are notable.
Final Thought
From hero of India’s startup boom to a founder in a global legal firestorm, Byju Raveendran’s journey is a cautionary tale. The $1.07 billion order is more than just a number — it signals how the interplay of rapid growth, complex financing, jurisdictions and governance can converge in dramatic fashion. As the appeal unfolds, it will be a case study in risk, recovery and the limits of startup promise.
Reviewed by Aparna Decors
on
November 23, 2025
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