The CEO of GeekLurn, an edtech company based in Bengaluru that offers data science courses, has been arrested on charges of defrauding thousands of students. Kamalapuram Srinivas Kalyan, the CEO of GeekLurn, is accused of raising educational loans in students’ names and misappropriating the sanctioned funds. The Bengaluru Police estimates that around 2,000 students have been affected by this scam, with a total amount of INR 18 crore ($2.5 million) being misappropriated.
According to police officials cited by the Indian Express, the scammers deceived approximately 2,000 students, raising a total of INR 18 crore. Each student’s loan amounted to over INR 2 lakh. Kamalapuram Srinivas Kalyan, the founder and managing director of GeekLurn, has been arrested. His LinkedIn profile indicates that he is also associated with three other companies under the GeekLurn brand: GeekLurn HR, a human resources platform; GeekLurn Asia, a defunct Singapore-based entity; and GeekLurn AI, an AI platform. The CFO, Raman PC, and the operations head, Aman, who are also accused in the case, are yet to be arrested.
The modus operandi of the scam involved GeekLurn allegedly taking out loans in students’ names as course fees. According to an impacted student’s LinkedIn post, GeekLurn was supposed to pay the loan installments and deposit the loan EMIs in the student’s account as a “scholarship” until the student secured employment. However, GeekLurn stopped making payments two months later, leaving students burdened with loans.
The affected students have also alleged the involvement of non-banking financial companies (NBFCs), such as Aditya Birla Finance and LiquiLoans, in the scam, although these claims are yet to be verified.
Deputy Commissioner of Police P Krishnakanth stated that the fraud was operating in neighboring states as well, with authorities from Maharashtra and Andhra Pradesh seeking custody of the prime accused.
This incident adds to the waning confidence in the Indian edtech sector, which has experienced a significant decline in funding. In May 2023, Indian edtech startups raised only $6.2 million in funding, a decrease of 82% compared to the nearly $35 million raised in the previous year, according to Inc42 data.
As the investigation continues, the arrest of the GeekLurn CEO highlights the importance of exercising caution when dealing with educational loans and the need for stricter regulations to protect students from fraudulent activities in the edtech industry.
