Byju’s, the edtech startup, has closed all of its offices across India, except for its Bengaluru headquarters in Knowledge Park. The company has asked its employees to work from home until further notice due to financial difficulties. The closure of offices is expected to help the company overcome its finance crunch. The company had reportedly already decided to close down offices on expiry of their lease as part of a restructuring exercise last year.
The tuition centres, however, will remain open. There are around 300 of them across the country. Despite raising $200 million via a rights issue, Byju’s is unable to access or use the funds due to objections by investors. The funds raised through the special stock sale are being safeguarded in a separate account, as per the orders of some important investors.
The company has been instructed by the Bengaluru bench of the National Company Law Tribunal (NCLT) to keep the proceeds from the rights issue in a separate account until the resolution of the case with investors. As a result, Byju’s is unable to use the funds to clear the pending salaries of its employees. The processing of salaries for February was delayed twice over, and partial disbursement of salaries only happened recently.
In an internal communication, Byju’s founder and CEO, Raveendran, expressed regret to over 20,000 employees in a letter citing challenges in processing salaries last month due to capital shortages and the current delay despite available funds.
