Byju’s, an Indian edtech startup, appears to be experiencing a cash crunch. According to recent media reports, the firm’s founder, Byju Raveendran, has been taking loans against his Bengaluru homes in order to pay employees’ salaries.
Though there has been no official confirmation, Raveendran is said to have taken a $12 million loan to pay off the debts of 15,000 employees of Think & Learn, Byju’s parent company. The digital learning platform for children based in the United States is also for sale for $400 million.
In addition to this financial strain, the company is embroiled in a legal battle with creditors for failing to pay interest on a term loan.
The company that made headlines for its meteoric rise is now bankrupt. The amount owed to the founder is said to be around $400 million.
Since last year, the edtech firm has laid off thousands of people, with hundreds of them working for its group companies, WhiteHat Jr and Toppr. It announced an 11% workforce reduction in September, affecting approximately 4,000 people. Arjun Mohan, CEO of Byju’s, has overseen a massive restructuring of the company. The goal has been to simplify its operating structures while also reducing costs and improving cash flow. Byju’s has been caught between its obligations to lenders, who expect timely repayments, and the need to raise additional capital through fundraising efforts for some time.