[Chetan_Rao]

Originally Posted by Samurai

Byju's has finally decided to shut down one of their scam companies...

You'd think one scammer would know another in their own industry, but they paid 300 million to acquire it, so they could plug it into their larger scamming MLM.

Scam-ception!

[m8002?]

About 2 decades back, Byju's was a small niche player preparing people for the IIMs and IITs. And doing a decent job at that. I remember them having a small office in Koramangala opposite Forum mall in the early 2000s.

I guess the VCs then entered and enticed Mr.Byju with lots of money to become a "startup" and the team fell for it. Its really sad to see the state the company is in - not that they are bankrupt but the extend they go now to enroll kids into their programs which is just cheating.

And boy, I am glad I dont have to see their cringe worthy ads where VCs are lining up to fund 10 year olds because they joined WhiteHat Jr.

[Samurai]

https://www.business-standard.com/ar...0201068_1.html

One of the rare cases where I agree with NRN.

N R Narayana Murthy, co-founder of Infosys, blamed the venture capitalist community for inculcating a culture among entrepreneurs to chase growth at all costs. He said the VC model of investment looked like a ponzi scheme.

“I would hold venture capitalists responsible who propounded the theory that only the top-line is important and not the bottom-line. I think that is completely wrong. In many ways it looks like a ponzi scheme. Investors say they are in series B, then go to series C, and sell shares to others at a profit, but it is the series Z fellow who is left with a tin box. Hence, I am not a critique of the younger people but of the older people, who have to be open and honest in saying things as it is,” said Murthy. He was speaking at a fireside chat at the Nasscom Technology and Leadership Forum 2023.

VCs fund the salaries and the marketing budget, enabling startups pay insane salaries without the revenue to match it. Marketing budget is to raise the valuation. Who cares if the company delivers/creates value...

[deathwalkr]

Originally Posted by Samurai

Byju's has finally decided to shut down one of their scam companies. What is the point of a scam if it makes only losses?

Pardon my ignorance of industry jargon but what does organic growth mean?

"We are merely optimising it for organic and efficient growth"

[fhdowntheline]

Organic growth is that which is achieved by employing ones own resources, financial and/ or otherwise . Inorganic is through external acquisitions.

[Samurai]

Originally Posted by deathwalkr

Pardon my ignorance of industry jargon but what does organic growth mean?

When the company grows naturally, without the steroid of external financing like VC. Even if they take loans, they should be able to pay the EMIs from the revenue generated.

[binand]

Originally Posted by deathwalkr

Pardon my ignorance of industry jargon but what does organic growth mean?

Organic growth is that which is caused by sales growth of own lines of business - basically, growth that is not via acquisitions.

[srini1785]

World Startup Convention: The India start-up gala that exploded into a scandal

Probably a case of bad event management coupled by hype. They just over promised and went belly up. I doubt if the organizers had an intention to scam.

https://www.bbc.com/news/world-asia-india-65200441

[Samurai]

https://www.livemint.com/news/world/...366040013.html

Two Indian-origin executives of Outcome Health, a Chicago-based health technology start-up, have been found guilty by a federal jury in the US of operating a corporate fraud scheme that victimised customers, lenders, and investors and resulted in at least $45 million in overcharged advertising services.

[green_ninja]

https://www.moneycontrol.com/news/tr...-10464141.html

This lady seems to be the Indian "non-tech" version of Theranos fame (or infamy) Elizabeth Holmes!

[androdev]

https://indianexpress.com/article/in...tions-8582419/

ED searches home, offices of Byju’s CEO Raveendran in Bengaluru over ‘FEMA violations’
In a tweet, the ED said that a total of three premises of Byju's CEO Raveendran were raided recently and various incriminating documents and digital data were seized.

[frewper]

Originally Posted by androdev

https://indianexpress.com/article/in...tions-8582419/

ED searches home, offices of Byju’s CEO Raveendran in Bengaluru over ‘FEMA violations’
In a tweet, the ED said that a total of three premises of Byju's CEO Raveendran were raided recently and various incriminating documents and digital data were seized.

ED getting involved in BYJUs is huge. ED never gets involved unless and until there are serious lapses. What is more shocking is that Financial statements for 20-21 is not present and no audits since then. How on earth does anyone get away with that in todays day n age ?

[Nissan1180]

Originally Posted by frewper

ED getting involved in BYJUs is huge. ED never gets involved unless and until there are serious lapses. What is more shocking is that Financial statements for 20-21 is not present and no audits since then. How on earth does anyone get away with that in todays day n age ?

Good to see people still believe in the agencies despite what they have been Upto politically.

The rumour is that these raids are due to election funding issues.

No one got involved when activists and education experts criticised the Byjus model for trapping poor parents into paying huge EMis on not-so-useful tuition classes for kids.

[dailydriver]

Originally Posted by Nissan1180

Good to see people still believe in the agencies despite what they have been Upto...

Any sensible observer would understand that not everything is above aboard at Byjus, especially in the last two-three years.

Any pragmatic observer would also understand that once the agencies enter the field, the likelihood of trash being swept under the carpet increases many fold.

That said, Byjus' is a typical case of trying to grow too big too soon. It was a good start-up that got carried away by fame and lost its way.

There's still time to turn things around. Let's see.

[androdev]

Originally Posted by Nissan1180

Good to see people still believe in the agencies despite what they have been Upto politically.

The rumour is that these raids are due to election funding issues.

No one got involved when activists and education experts criticised the Byjus model for trapping poor parents into paying huge EMis on not-so-useful tuition classes for kids.

What if that rumour is "planted"?

There is a big difference between unethical business practices without breaking any laws (like emotional blackmail of poor parents to sell JEE coaching to kids who are hardly literate) vs outright financial fraud.

The truth is that most funded startups (especially in India) are first and foremost about financial outcomes than about building a lasting business. The more money you raise, the more murky things are likely to get.

Founders need to have an extraordinary character of integrity to wait for 10s of years to be rewarded by an elusive legitimate exit while their equity is getting diluted to the point of losing any sense of ownership and control. The temptation to siphon off money to ensure you and your family are not left without anything to show for the years of hard work and sacrifice is extremely strong. It can be as simple as paying yourself ginormous salaries and perks to creating shell companies, or can be outright criminal fraud.

Can you image being the founder of a high profile startup that raised massive amount of funding and paid yourself just market salary with the sincere hope that you will get your big reward during a successful exit/IPO, etc.? You would be stupid not to hedge against the more likely outcome of the company going bust. And when you are hounded by greedy, opportunistic, impatient, unethical investors, even the best of the founders become "pragmatic". Basically, in most cases, the romantic love story dies the moment you raise serious money.

This is just my hypothesis of what goes behind the scenes, I'm not privy to any of these things to have any first hand knowledge.