Sumeru Ventures, a curious Los Angeles-based fund, participated in a $800 million round in Byju’s. But the money hasn’t come in and questions are being raised about the fund’s antecedents

Skeletons are tumbling out of Byju’s closet thick and fast. The Morning Context has learnt that the $800 million (around Rs 6,300 crore) private equity investment the company announced in March has gone off track.

“The money from Sumeru Ventures, one of the participants in the round, hasn’t landed,” says a person in the know. Things came to the point where one of the investors initiated a probe by corporate investigation and risk consulting firm Kroll, which found “serious

discrepancies with the company, which has derailed the entire investment”. This person adds that they can’t share the Kroll investigation report for fear of being identified.

Byju’s, India’s largest edtech company, announced in March that it had raised $800 million from Sumeru Ventures, Vitruvian Partners and BlackRock, at a valuation of $22 billion. The company said that CEO Byju Raveendran would lead the round with a

personal investment of $400 million. We have written in detail about how Raveendran is stitching together the funds he promised and how he is scampering to raise any money he can.

The company’s filings with the ministry of corporate affairs show that 16,031 Series F

preference shares were allotted to Vitruvian Partners on 29 March for Rs 571 crore. There has been no such filing in the case of either Sumeru Ventures or BlackRock since the March announcement. This means Byju’s is looking at a Rs 2,500 crore-sized hole in the funding.

“It also seemed like Sumeru was representing BlackRock, when in reality it wasn’t. All of this has cast a shadow on the deal,” says the person quoted above.

Further digging into the funding round in general, and Sumeru Ventures in particular, raised multiple red flags around the venture fund, its funding and investments, and the people managing it. We reached out to 18 people, including entrepreneurs, venture

capitalists and industry experts from India and the US, to find out more about the fund, but none had heard about either the fund or its managing directors.

Bengaluru-based Byju’s has been in the thick of conflicting news. On the one hand, it is said to have offered $1 billion, or around $15 per share, to the board of Lanham, Maryland-based edtech company 2U. On the other, reports suggest it has fired thousands of employees across functions from its group companies to streamline costs.

Byju’s has also delayed payment for the acquisition of Aakash Educational Services Ltd, which it bought for $1 billion in cash and stock last year. Last week, we reported that PE firm Blackstone Group and the Chaudhrys, AESL’s former owners, could send a notice to the edtech company for non-payment.

The derailment of the March funding round could be a massive setback for the company trying to navigate multiple headwinds in the form of the great unwind in edtech, a funding winter and negative market sentiment while trying to conserve cash and stay on course for a public listing.

An email with a detailed set of questions sent to Byju’s and Sumeru Ventures on Sunday remains unanswered.

Red flags galore

The first thing you notice on Sumeru Ventures’s website is its indelible link with spiritual guru Ravi Shankar and his The Art of Living Foundation. More on it in a bit.

According to the website, Sumeru Ventures is a $1 billion global technology fund “actively investing across all stages in innovative companies, utilizing transformational

technologies like Artificial Intelligence, Machine Learning, Blockchain to create impact”. But try looking for the companies it has funded over the years and you’ll return empty- handed. The website doesn’t have a portfolio section.

Now, VC funds wear their investments as a badge of honour. They highlight their most successful or promising investments prominently on their website. It becomes a significant part of the fund’s identity. Not having any portfolio, therefore, is more than just unusual for such a large fund.

So we went to Crunchbase, a platform that provides corporate information, to track Sumeru Ventures’s investments. Crunchbase shows three investments—Sumeru Ventures led a $50 million round in Series C in GOQii, participated in the $800 million PE round in Byju’s and the $805 million Series J round in VerSe Innovation—all in 2022. Again, it

is unusual for such a large fund, which was launched in 2018, to stay dormant all these years. Especially considering that two of those four years have been pandemic years, in which tech businesses across the world scaled new heights on the back of VC funding that flowed like there is no tomorrow.

“There are multiple red flags,” says an entrepreneur, asking not to be named. “No mention of their portfolio, not even a handful of investments in four years for a fund of that size is highly unusual.”

“VCs have a lot of opinions. Blogs and LinkedIn are their favourite way of sharing them. Sumeru Ventures’ blog hasn’t been updated since 2020. Their LinkedIn page is the same. The website feels a bit old and not updated, which is not a good look for a tech investor,” says a second entrepreneur, also asking not to be named.

The people managing the fund are equally intriguing. They don’t have stellar careers or experience in investing or managing such large funds.

Sumeru Ventures has two managing directors—Jatin Chaurasia and Saumen Chakraborty.

The “Team” landing page misspells Chakraborty’s name. Not a crime, but these little details matter when you want to play on the world stage. Besides, the domain name is sumeruventure.com. No venture capital fund will be so careless as to let such an inconsistency go unchecked for as many years as the fund has existed.

The website says Chakraborty has over 30 years’ experience in the “global information technology industry” and has been associated with “some of the world’s largest fortune 500 companies like DEC, IBM, Quadrant II Technologies, Microsoft, and Hughes”.

Curiously though, Chakraborty’s LinkedIn profile doesn’t list any work history before Sumeru Ventures.

An internet search led to a Kolkata-based IT services and solutions company, Intellisys

Technologies & Research Pvt. Ltd, where he was the CEO and MD. The only other director at that company is one Chandrani Chakraborty. According to ZaubaCorp, Intellisys is still active. However, according to the MCA website, it last filed annual returns in 2017. The

company’s “Contact us” page shows a 404 Error, and the latest news and events date back to 2016. Its LinkedIn page has no posts or information.

Chakraborty was named the chairman of the Electronics and Computer Software Export Promotion Council for 2017-18. But there is no mention of experience in investment or managing a fund. He, too, has a Ravi Shankar connection. The Intellisys website has

photos from a visit to the guru for a “technology demonstration”, in one of which Chakraborty is seen touching Ravi Shankar’s feet.

Chaurasia, the other managing director of the fund, did a couple of stints as an analyst in Seattle before heading to Sumeru Inc., which provides technology consulting and digital solutions, in Los Angeles. He has been with the company since 2007 and is now its president. The Sumeru Inc. website has more information about the companies it has worked with—the list includes The Art of Living Foundation—but it is not up-to-date. Two people on its board of directors don’t have a LinkedIn page. Multiple people listed on the “Team” page moved on years ago.

Chaurasia was also the CEO of The Art of Living Digital and joined Sumeru Ventures in February 2019. Again, there are multiple links with The Art of Living Foundation and no history of investments or managing funds.

Neither managing director has the usual VC background. A venture partner, who also asked not to be named, told this writer that the fund looks more like a front for something else.

“As a founder, I’m looking to learn as much about the people on the board, so if I can’t find enough information, I will not want to partner with them,” says the first entrepreneur quoted above. “If I saw this separately, I wouldn’t pitch to them anyway.”

“Their address points to a church [the Second Church of Christ Scientist], the same place where the Art of Living seems to be registered,” says the second entrepreneur. “That’s not a business address, and I would be wary of any bank accepting that.”

It seems like a very unusual match for a company of Byju’s stature. It would be interesting to know how the company found them or what led them to Byju’s. This brings me to something even more unusual.

The curious link

Last week, a photo of Raveendran appeared with Rajita Kulkarni Bagga, the president of Sri Sri University, in Cuttack, Odisha. In her career spanning nearly two decades, Bagga

has had multiple stints with companies and trade bodies. But her three longest stints have been with the Ved Vignan Maha Vidya Peeth in Bengaluru, The Art of Living Health & Education Trust and Sri Sri University, where she has been since 2009.

Founded in 2009, Sri Sri University is a private university which offers multiple degree and certificate courses. To find out more, we reached out to people in Cuttack and turned to Quora.

All the documents and approvals seem to be in order, but the ground report is that it isn’t a very popular university. “Jinka kahin admission nahi hota, wo yahan admission le lete hain (those who don’t get an admission elsewhere come here),” says a person in the know, asking not to be named. “It doesn’t seem to be a serious university. It seems like a front

for Sri Sri Ravi Shankar’s other businesses.”

Here’s a seven-month-old review from a student on Quora:

I am an ex student of this university and the first thing I want to tell you is that students are made to write fake answers on Quora if they intern with the college.

Only come to this place if you have no other option left in your life. I have seen decent students with potential come to this place and waste their years including mine.

…80% of the faculty is below average. They don’t have proper command of the english language.… No teacher is inspiring or interesting even.

The management is the worst. I’ve been suspended because I chose to spoke about homosexuality…. I’ve been threatened to be expelled if I wore shorts to the mess. Female students cannot wear shorts outside of their hostels. The whole place is sanscitized and

there’s no intellectual discussion ever. You are taught that yoga and meditation cures everything.

Raveendran’s meeting with Bagga, therefore, strikes one as unusual. It is possible that it was just a one-off social meeting, and there isn’t much in it to interpret. But the repeated occurrence of The Art of Living Foundation in connection with Byju’s raises suspicion: What is an entrepreneur who built an empire based on the joy of learning and promoting scientific temperament doing with associates of a spiritual guru?

Until there is a cosmic alignment of the stars under which Byju’s, Great Learning, 2U and Sri Sri University come together to launch something new, which is a long shot, this connection doesn’t make sense. But I digress.

The bigger point, irrespective of all the connections, is the missing Rs 2,500 crore, which Byju’s announced as raised. How the absence of the much-needed funds impacts the company’s valuation and its future strategy is something to watch out for. For now, there are too many questions and not enough answers