In a significant development for the Indian edtech sector, Byju Raveendran, founder of Byju’s, has announced plans to appeal a U.S. bankruptcy court order mandating him to pay over $1.07 billion.
The Delaware court issued a default judgment on November 20, 2025, holding Raveendran personally liable for allegedly concealing and diverting funds from Byju’s Alpha, the company’s U.S.-based financing arm.
Background of Byju’s Financial Woes
Byju’s, once hailed as India’s most valuable startup with a peak valuation of $22 billion, has faced mounting financial and legal challenges over the past few years.
The company’s rapid expansion through aggressive acquisitions and fundraising—raising over $6 billion from global investors—has been overshadowed by accusations of mismanagement and financial opacity.
Details of the U.S. Court Ruling
The court’s decision stemmed from Raveendran’s alleged failure to comply with discovery orders, particularly in tracing $533 million of missing funds, which the court described as “willful” non-cooperation.
Filed by Byju’s Alpha (now under lender control) and GLAS Trust Company LLC, the petition marks a critical escalation in a long-standing legal battle over a $1.2 billion loan.
Raveendran’s Defense and Counterclaims
Raveendran’s legal team has criticized the ruling as “rushed” and “misleading,” arguing that he was denied a fair chance to defend himself.
They have also revealed plans to file counterclaims worth $2.5 billion, signaling a fierce fight ahead in the U.S. legal system.
Impact on Byju’s and Indian Edtech
This ruling deepens the crisis for Byju’s, which has seen its valuation plummet to around $1 billion, a staggering 95% drop from its peak.
The case raises broader concerns about governance and transparency in India’s startup ecosystem, potentially impacting investor confidence in the edtech sector.
What Lies Ahead for Byju’s?
As Raveendran prepares for the appeal, the future of Byju’s hangs in balance, with ongoing legal battles in multiple jurisdictions and mounting creditor pressure.
Analysts suggest that without a clear resolution or restructuring, Byju’s may face further insolvency proceedings, marking a cautionary tale for hyper-growth startups worldwide.
Maria Lourdes
