India’s Most Valuable Startup Byju’s Raided Under Anti-Money Laundering Law

India’s criminal investigation agency conducted searches on three properties belonging to the edtech giant Byju’s and its founder, Byju Raveendran.

On Saturday, the agency seized various documents and digital data, which were deemed “incriminating.” The Enforcement Directorate is authorized to enforce the nation’s anti-money laundering law FEMA.

India’s Enforcement Directorate Beefs Up Surveillance

The agency has conducted multiple similar probes recently, including those at crypto firms WazirX and CoinSwitch Kuber, phone manufacturer Vivo, and news broadcaster the BBC.

The investigation into Byju’s was prompted by various complaints from private individuals and is still underway. Byju Raveendran, the founder, was summoned several times but remained evasive and did not appear during the investigation.

So far, the investigation has revealed that Byju’s raised approximately $3.4 billion in foreign direct investment between 2011 and 2023.

During the aforementioned period, the startup successfully transferred approximately $1.1 billion to foreign entities while designating roughly $115 million as expenses for advertising and marketing purposes.

It appears that the delayed filing of Byju’s annual financials prompted ED to initiate an investigation. The findings, which pertain to the amount of funds raised by Byju’s and subsequently invested in overseas units, have been widely disclosed by the company and media outlets in the past.

“The company has not prepared its financial statements since the financial year 2020-21 and has not got the accounts, audited which is mandatory. Hence, the genuineness of the figures provided by the company are being cross-examined from the banks,” Enforcement Directorate said in a statement Sunday.

Byju’s Maintains the Search Was a Routine Inquiry

Headquartered in Bengaluru, the startup Byju’s, is India’s most valuable. Officials at the company affirmed that the investigations conducted by the agency were a “routine inquiry.”

The company further added that it upholds complete transparency with the authorities and has already provided all the necessary information that was requested.

Notably, Byju’s has secured hefty investments from prominent backers such as BlackRock, Sequoia India, Lightspeed Venture Partners India, and UBS.

“We have nothing but the utmost confidence in the integrity of our operations, and we are committed to upholding the highest standards of compliance and ethics,” a spokesperson of Byju’s legal team said in a statement. “We will continue to work closely with the authorities to ensure that they have all the information they need, and we are confident that this matter will be resolved in a timely and satisfactory manner. We want to emphasize that it is business as usual at Byju’s.”

The spokesperson added that the company’s unwavering dedication lies in providing top-notch educational offerings to its valued customers, not only in India but worldwide. ED’s statement coincides with Byju’s substantial funding round and the upcoming IPO of its physical tutoring arm, Aakash.

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