In a shocking turn of events, the CEO of Bengaluru-based edtech company, GeekLurn, has been apprehended for defrauding a significant number of students. Kamalapuram Srinivas Kalyan, the mastermind behind GeekLurn, stands accused of raising educational loans in the names of unsuspecting students and misusing the funds. The scam, estimated to have affected approximately 2,000 students, has led to a staggering amount of INR 18 crore ($2.5 million) being misappropriated.
According to Indian Express, authorities have revealed that the perpetrators managed to deceive nearly 2,000 students, raising a total sum of INR 18 crore. Each student was tricked into securing a loan exceeding INR 2 lakh. Kamalapuram Srinivas Kalyan, the founder and managing director of GeekLurn, has since been taken into custody. Notably, Kalyan’s LinkedIn profile reveals his association with three other entities under the GeekLurn brand: GeekLurn HR, a human resources platform; GeekLurn Asia, a now-defunct Singapore-based company; and GeekLurn AI, an AI platform. The CFO, Raman PC, and the operations head, Aman, who are also implicated in the case, remain at large.
The fraudulent scheme operated by GeekLurn involved acquiring loans on behalf of students, ostensibly as course fees. As per the account of an affected student in a LinkedIn post, GeekLurn was supposed to pay the loan installments and deposit the loan EMIs in the student’s account, masquerading as a “scholarship,” until the student secured employment. However, after two months, GeekLurn ceased making payments, leaving the burden of the loans squarely on the students’ shoulders.
While the involvement of non-banking financial companies (NBFCs) like Aditya Birla Finance and LiquiLoans in the scam has been alleged by the affected students, these claims are yet to be substantiated.
Deputy Commissioner of Police P Krishnakanth stated that the fraud extended its operations to neighboring states as well, with authorities from Maharashtra and Andhra Pradesh seeking custody of the main accused.
This alarming incident further erodes confidence in the Indian edtech sector, which has been experiencing a significant decline in funding. Inc42 data reveals that in May 2023, Indian edtech startups managed to secure a mere $6.2 million in funding, marking an 82% decrease compared to the previous year’s nearly $35 million.
As the investigation unfolds, the arrest of the GeekLurn CEO underscores the importance of exercising caution when dealing with educational loans and highlights the pressing need for stricter regulations to safeguard students against fraudulent activities within the edtech industry.