complaints against byju’s And group entities were exposed during a discussion, as the edtech leader caters to a large student base, people informed of the matter.
consumer affairs department expressed his concerns regarding this and various other aspects during a meeting with edtech companies and its self-regulatory organization India Edtech Consortium (IEC) on June 24, sources privy to the matter told ET.
Senior department officials also specifically addressed their concerns on the same day in a follow-up call to executives of Byju’s – India’s Most Valuable Startup – saying that most of the complaints they received were related to the Bengaluru-based startup and its group units. Sources said. The company’s co-founder Divya Gokulnath, wife of founder Byju Raveendran, also joined the call, he said.
Thereafter, Gokulnath and senior officials shared a detailed action plan with the officials to address the grievances, another person aware of the matter said.
Sources said the department officials informed during the meeting that they have received 147 consumer complaints against edtech startups. He is expected to share the full list of complaints with edtech companies soon, he added. “Aggressive mis-selling to parents is something that, among other issues, was discussed in some of the claims being made in the advertisements. Byju’s is working in collaboration with the Advertising Standards Council of India (ASCI). was advised to do so.”
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Industry self-regulatory body ASCI last month said that of the 5,532 advertisements processed in the last financial year, 33% of complaints were from the education sector, which includes edtech as well as traditional educational institutions.
“He (Byju) is now closely engaging with ASCI,” said this person.
A spokesperson for Byju’s and the Department of Consumer Affairs did not respond to ET’s email until press time on Thursday.
Gokulnath is a key member of the IEC, which was set up earlier this year under the Internet and Mobile Association of India. Byju’s and group companies, as well as Unacademy and Upgrade, are some of its members.
“They (IEC) have held meetings with the education ministry officials, but the meeting with the consumer affairs department shows that they are aware of the consumer complaints that are raised by parents, students and professionals and need to be brought under their purview. also need to be taken up with companies in the U.S.,” said an industry executive involved in the discussion.
Separately, the IEC has received at least two complaints against Byju’s and its coding unit WhiteHat Jr., people familiar with the matter said.
ET could not independently verify the nature of the complaints or if they had yet been fully addressed.
“You can complain against any edtech firm with the council and it enforces its self-regulatory code through a committee and it is shared with the companies concerned for improvement. The view of the IEC is that self-regulation should be practiced in spirit, or it may lead to a strict policy regime on the part of the government,” said one of the sources.
The person said the government has become wary of the increasing number of complaints against edtech startups, including mis-selling of loans or financing options for various courses that these platforms are offering.
Another industry executive said, “The issue is also significant as Byju’s has become a household name and any action against the firm is also not good news for other companies in the sector.”
ET reported on June 30 that
Byju’s was considering rebranding Whitehat Jr. Which has been under scrutiny for allegedly some misleading advertisements.
Byju’s recently fired at least 600 employees from group companies WhiteHat Junior and Topper.
Byju’s, valued at $22 billion, also has yet to close its final $800 million funding round and its audited financial results are yet to be filed with the Registrar of Companies (ROC).
According to the company, Raveendran recently completed a $400 million investment in the company arranged through debt financing from financial institutions as part of an $800 million round.
On July 4, Byju’s said it would announce its latest audited financials in the next 10 days. Of the $800 million in funding announced in March, it expects to receive $250 million by August.
Raveendran is also looking to close a potential acquisition of US-based edtech Player 2U, for which he is bidding for $2.4 billion through financing from JPMorgan.
Last November, Byju’s closed a $1.2 billion term loan.
“I don’t think there is any lack of capital demand for Byju’s,” Raveendran told ET in May.
Over the past 12-18 months, Byju’s has spent about $2.5 billion on multiple acquisitions in India and abroad. The acquisition of brick-and-mortar coaching center Aakash Institute for nearly $1 billion has been its biggest deal to date.
ET reported on July 4 That Byju’s had cleared the required payments for the deal after initial delays.
“Loan is one of the most efficient ways to raise capital if you have a proven track record of aggregating or financing your clients. These are the partners who have been with us for the last three to four years,” said Raveendran in May. Said during the interview.
Venture funding for startups in India declined by 37 per cent in the June quarter compared to the March quarter, ET reported on July 4.
ET had earlier reported that Unacademy cofounder Gaurav Munjal had told his team that this
Need to cut costs significantly and remain cash flow positive, while its senior management, including the founders, is taking pay cuts as well as closing business verticals that do not fit the product market.
In February, Byju’s said it wanted to invest $200 million to develop tuition centers in 200 cities. Rivals Unacademy and Vedantu are also expanding offline.