The cash crunch at Byju’s, the Indian edtech startup seems to be continuing. Latest media reports say that Byju Raveendran, founder of the firm, has been taking loans against his houses in Bengaluru to raise the money to pay salaries to the employees.
Though there is no official confirmation, Raveendran has reportedly taken a loan of about $12 million to clear the dues of 15,000 employees of Think & Learn, the parent firm of Byju’s. The US-based kids’ digital learning platform is also on sale for $400 million.
Amidst this financial pressure, the company is also embroiled in a legal dispute with creditors for failing to pay interest on a term loan.
The company that had grabbed headlines for its rapid rise is now neck deep in debt. Outstanding against the founder himself reportedly amounts to about $400 million.
Since last year, the edtech firm has seen thousands of layoffs, with hundreds being let go in its group companies, WhiteHat Jr and Toppr. In September, it had announced the reduction of its workforce by 11 per cent, impacting about 4,000. The firm has been undergoing massive restructuring under Arjun Mohan, CEO, Byju’s. The aim has been to make its operating structures simpler, cutting costs and improving cash flow. For some time now, Byju’s has been caught between its commitments to lenders, who expect timely repayments, and the need to secure additional capital through fundraising efforts.
