Byju's founder pledges Bengaluru homes to pay salaries to his 15,000 employees amid cash crunch
Byju Raveendran, the founder of Byju's, has reportedly pledged his family's residence in Bengaluru and an under-construction villa in Epsilon as collateral to secure a $12 million loan, aiming to cover employee salaries.
FollowByju Raveendran, the founder of the prominent Indian edtech firm Byju’s, has reportedly pledged both his residence and the homes owned by his family members to generate funds for compensating employees amidst the company's financial challenges, as per a Bloomberg report quoting sources familiar with the situation. The family's two residences in Bengaluru, along with Raveendran's under-construction villa in Epsilon—a luxurious gated community in the city—have been put forth as collateral to secure a $12 million loan, said the sources, who preferred to remain anonymous as this information is not yet public.
The startup utilized the raised capital to disburse salaries to 15,000 employees at Byju’s parent company, Think & Learn Pvt, this Monday, according to the reports. In a concerted effort to stabilize the company and alleviate financial strains, the founder has been actively pursuing various strategies. Once positioned as India’s most valuable tech startup, the company is currently in the process of selling its US-based children's digital reading platform for approximately $400 million. Simultaneously, it is entangled in a legal dispute with creditors regarding a missed interest payment on a $1.2 billion term loan.
Once valued at nearly $5 billion, Raveendran has accrued personal debts amounting to approximately $400 million by leveraging all his shares in the parent company, as per the sources. Additionally, he reinvested the $800 million obtained from share sales over the past few years back into the company, leaving him financially strained, they added.
In its recent financial disclosure, Byju’s reported its first results in years, revealing a slight narrowing of losses at Think & Learn amid a surge in business during the pandemic. The startup also confirmed that an Indian federal agency has concluded an investigation into its overseas fundraising, stating that any potential penalties are anticipated to be nominal.
