Indian Edtech giant Byju's financial troubles are far from over as founder Byju Raveendran has reportedly used his residence, along with homes owned by his family members, as collateral to secure funds.
The 2011 startup utilised the obtained funds to meet the payroll expenses of 15,000 employees at Byju's parent company, Think & Learn Pvt.
Speaking anonymously, people related to the matter noted, two homes owned by Raveendran’s family in Bengaluru, situated in southern India, along with his villa under construction in Epsilon were leveraged as collateral to secure a $12 million loan.
The company is currently in the midst of negotiating the sale of its U.S.-based children's digital reading platform for approximately $400 million. Concurrently, it is embroiled in a legal dispute with creditors concerning a defaulted interest payment on a $1.2 billion term loan.
Besides this, the Indian edtech further decreased the notice period for its employees to 15-30 days from 15-60 days based on seniority levels.
Byju Raveendran recently gathered nearly 50 of the company's top leaders, reassuring them that they were engaged in a multi-front battle and that they would ultimately emerge victorious.
He stated in a recent statement, “A true entrepreneur is a war leader. What Byju’s is going through can only be seen as a war on multiple fronts against all odds”.
On the other hand, in the previous month, Byju’s released its first financial results in several years, revealing a slight reduction in losses at Think & Learn during a business boom in the pandemic era. Additionally, an Indian federal agency completed an investigation into the startup's overseas fundraising, and the company stated last week that any penalties, if imposed, are anticipated to be nominal.
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