Ei-iE

Education technology companies do not usually sponsor global sports tournaments. The brand logo of Byju’s, however, is currently displaying in football grounds in Qatar, after becoming an official FIFA World Cup sponsor. But the most highly-valued EdTech company on the planet is also carrying a lot of recent reputational damage and is reported to be in financial trouble. It may be using the World Cup to recover its reputation and generate income by exposing the brand to new international markets, even while controversy rages over human rights abuses during preparations for the tournament.

The global edtech decacorn

Byju’s has experienced astonishing market growth since it was established in 2011. It built its $22billion valuation from simple apps and video-based tutorials for students starting in preschool, first in India and expanding rapidly to other markets. According to the company, Byju’s business model reaches over 100 million students in 120 countries worldwide, with 7 million annual subscribers.

It has since rapidly diversified through a range of acquisitions and partnerships, extending into test preparation, higher education, tuition centres, as well as buying up platforms offering virtual reality, artificial intelligence, and educational gaming services. Most of its acquisitions were made in 2021 alone, costing the company an estimated $2.8billion.

Byju’s isn’t just a standard EdTech startup. Byju’s has scaled up through massive injections of investor finance to become a ‘ Big EdTech’ company with long-term global ambitions to transform education. According to founder Byju Ravendreen, ‘we are imagining and reimagining the way students will learn, unlearn and relearn in the future. Our aspiration is to build something that will last for decades’.

Its huge value makes it not just a ‘unicorn’ worth more than $1bn, but a ‘decacorn’ worth more than $10bn. And this colossal market value seems to have put it in a commanding position for even further rapid international expansion.

Sponsoring the World Cup is a major strategic investment for the company in growing the brand internationally towards its future aim. On the pitchside advertising boards, the Byju’s brand flips to read ‘The Future of Learning’. That puts its name alongside McDonald’s, Budweiser, Coca-Cola, Visa and other global brands. Having previously engaged in cricket sponsorship in India, it allegedly spent $30-40 million to become an official sponsor of the 2022 tournament, making it the first EdTech brand to be displayed at World Cup matches.

A ‘toxic’ brand

At the same time, Byju’s is also the subject of a rising tide of criticism. Critics accuse Byju’s of ‘toxic’ targeting of low-income families, high-pressure sales, misleading advertising, and exacerbating existing educational inequalities.

Byju’s also delayed its recent financial reporting by 18 months, with reports of significant income problems including non-payment by investors.

Just ahead of the World Cup kick-off, the company announced it was cutting thousands of staff, at the same time as raising a further $250 million from its existing investors and projecting that ‘2022-23 is set to be our best year in terms of revenue, growth and profitability’. The investors include Qatar Investment Authority, the sovereign wealth fund of the State of Qatar, with which it partnered earlier in 2022 ‘to launch a new edtech business and state-of-the-art research and development centre in Doha’.

By sponsoring the World Cup, Byju’s is depicting itself as an inspirational global brand as it strategically secures financial stability and longer-term growth. ‘Sometimes a lot of these sponsorship deals are not just for consumers but also for investors’, one commentator on the Byju’s sponsorship said. ‘Being a FIFA sponsor increases a company’s global stature’. In Byju’s case, he added, ‘I feel the intention is more from gaining international credibility as a financial brand than an educational brand’.

Building reputational capital

Sponsoring the World Cup is a risky move. The tournament is mired in controversies, especially concerning the abuse of migrant workers during preparations and other human rights issues. The international relations researcher David Wearing has argued that the ‘brands sponsoring the tournament benefit just as the regime does from the continued exploitation of migrant labour that is making the tournament possible’.

Earlier this year, a coalition of human rights organizations called for tournament sponsors to press FIFA to provide financial compensation for migrant workers of their families, and to remedy abuses of workers linked to preparation for the World Cup. Along with the majority of other official sponsors, Byju’s offered no public support or responded to requests to discuss tournament-related abuses.

Despite these controversies, Byju’s seems to see the games as an opportunity to boost its ‘reputational capital’. According to the media and communication researcher Michael Skey, sports ‘mega-events’ such as the World Cup are opportunities for both states and brands to launder their reputations—or ‘sportswashing’.

Investing in major sports tournaments is a chance for brands to construct positive associations and international exposure while deflecting attention from negative or unfavourable views. Building reputational capital is a key route to securing investor capital. In Byju’s case, this building of reputational capital seems to mean sportswashing its own brand and deflecting attention from company problems, while also gaining market advantages from the exploitation of migrant labour and other human rights abuses.

These are troubling signs of how Big EdTech firms may make use of highly controversial opportunities to secure global reputational capital, market growth and profitability. If education is a basic human right, then EdTech companies need to commit to ensuring they are rights-respecting organizations and not only market-focused firms chasing investment and profits at all costs.