The dramatic fall of India’s once-high-flying edtech sector has become a cautionary tale about unchecked expansion, weak governance, and the pressures of venture-capital-fuelled growth. At the centre of the controversy lies Byju’s, formerly valued at $22 billion and celebrated as India’s most successful startup success story. Allegations surrounding missing loan funds and financial mismanagement have triggered lawsuits, creditor battles, and regulatory scrutiny, shaking investor confidence globally.

Investigations linked to a $1.2 billion loan claim that hundreds of millions of dollars were transferred through complex financial channels, raising questions about transparency and accountability. Creditors have sought legal remedies, while courts in the United States and India continue to examine the company’s financial conduct. The company’s rapid expansion during the pandemic—through aggressive acquisitions and marketing—initially boosted growth but later exposed structural weaknesses when funding conditions tightened.

The episode highlights broader concerns within India’s startup ecosystem, where rapid valuations often outpace sustainable business fundamentals. Analysts argue that stronger governance, clearer financial reporting, and investor oversight are essential to restore trust. Beyond one company’s crisis, the controversy signals a turning point for India’s tech industry, pushing founders and investors alike toward more disciplined and transparent growth models.