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What is Byju’s?
Byju’s is an Indian edtech startup that offers online educational material for schoolchildren and competitive exam preparation. Founded in 2011, it quickly became one of the most valuable startups in the country, valued at over $22 billion. However, in recent years the company has faced significant controversies over dubious business practices.
Allegations of Fraudulent Activity
Byju’s faced accusations of exploiting a flawed Indian regulatory system and opaque accounting to cover up massive losses. Critics argued they misrepresented user engagement and retention numbers to justify huge valuations while pushing sales targets aggressively. Employees alleged facing immense pressure to resort to strong-arm tactics when students wanted to cancel subscriptions.
The BBC Investigation
In 2022, BBC published an investigation questioning Byju’s astronomical growth rates and usage numbers. Former employees claimed real user engagement was far lower than depicted. The report alleged Byju’s misrepresented metrics to raise billions from investors at inflated prices. It also highlighted complaints of discrepancies in renewal charges and refund policies.
Social Media Exposés
A Twitter account called ‘Byjus Scam Expose’ emerged sharing numerous testimonies from harassed parents unable to unsubscribe or get refunds as promised. People detailed manipulative upselling, unauthorized auto-renewals, failed services and ignored support requests. This public outcry undermined Byju’s carefully crafted reputation of trustworthiness.
Regulator Probes Initiated
Following the controversies, India’s Serious Fraud Investigation Office (SFIO) launched a probe into Byju’s financials over allegations of hiding millions in obligations. The ministry also ordered an independent audit of Byju’s books. Investigations aimed assessing any wrongdoing like FDI or accounting rule violations that could be referred for criminal prosecution if substantiated.
The FT Investigation
Meanwhile, the Financial Times conducted its own months-long investigation interviewing current and past employees and examining thousands of internal documents. It alleged massive losses were hidden using complex merger structures and Byju’s strong-arming students to shore up enrollment figures. While Byju’s denied wrongdoing, the detailed report intensified scrutiny.
Allegations of Coercive Sales Practices
Dozens shared stories of Byju’s employees harassing families for leads and pressuring them to upgrade or renew subscriptions with combative techniques. Users complained of receiving hundreds of threatening calls, messages and even visits even after canceling legally. Such coercion to meet targets raised serious ethics concerns around consent and customer rights.
Fallout and Regulatory Action
The barrage of allegations continues tarnishing Byju’s reputation as a benefactor. The controversies significantly slowed fundraising and new investments amid concerns around governance and accountability. Regulators also tightened rules for edtech firms on misleading ads, auto-renewals, unsolicited communications and opaque accounting practices impacting the wider industry.
Byju’s Response
Byju’s has consistently denied any wrongdoing, attributing negative media to motives of competitors. It claimed high retention through best-in-class learning programs and experience. However, the company’s defenses failed to address mounting evidence and first-hand experiences shared. The unaddressed controversies opened doors for copycat exposes adding more doubts.
Conclusion
On balance, while Byju’s products may benefit some students, its actual impact remains unclear amid serious allegations. The company requires full transparency to restore public trust eroded by investigations into disreputable business conduct. Only openness and compliance with proposed reforms can offset growing perception of Byju’s as an unregulated scam preying on consumer fears.
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