New Delhi: Byju’s, the pioneering e-learning company in India, is grappling with a series of difficulties that threaten its stability. Over the past few days, the company has plunged into a crisis marked by significant losses, non-payment of employee salaries, layoffs, investor disputes, and severe cash flow problems. The situation has escalated to the point where Byju’s subsidiaries are on the brink of bankruptcy, unable to repay a substantial loan of Rs 1.2 crore.
The Troubles Unfold:
- Financial Strain: Byju has been burdened by mounting debt, unhappy investors, and legal battles. In January, the company reported a consolidated loss of 82.3 billion rupees for 2022, and it has yet to present audited financials for 2023.
- Employee Salaries Delayed: Employees have faced delayed salaries due to the company’s liquidity crisis. Byju recently informed its workforce that salaries would be postponed, citing difficulties in accessing funds raised during a rights issue.
- Allegations Against Management: Lenders have accused Byju’s management of incompetence, questioning their ability to fulfill their duties. Founders Byju Ravindran, Riju Ravindran, and Divya Gokulnath are also under scrutiny for alleged irregularities related to a loan amount of Rs 53.3 crore.
- Byju Alpha’s Bankruptcy: Byju Alpha, a subsidiary of Byju Group, has already succumbed to bankruptcy, owing a staggering Rs 10,009 crore (approximately 12 million US dollars).
- Subsidiaries in Debt: Byju Group’s subsidiaries Neuron Fuel International Company, Epic Creations International Company, and Tangible Play International Company are facing bankruptcy proceedings. Byju’s US-based creditors have filed a petition in Delaware seeking to declare these companies bankrupt.
A Giant’s Fall:
Once valued at $22 billion, Byju’s has seen its fortunes decline dramatically. The company’s troubles serve as a cautionary tale for other Indian start-ups, with investment firm BlackRock slashing its valuation to $1 billion. Social media is abuzz with complaints from customers who accuse Byju of pressure selling and jeopardizing vulnerable individuals’ savings.
