Byju's Founder Wagers Personal Assets in 12M Dollar Financial Rescue
Byju's Founder Puts Homes on the Line, Unconventional Moves to Navigate Cash Crunch!
5 December 2023
Byju Raveendran, founder of Byju's, pledges family homes and an under-construction villa as collateral for a $12 million loan amidst the company's cash crunch.
Raveendran personally raises debts of $400 million, pledging all his shares in the parent company, and reinvests $800 million, leaving him cash-strapped.
Byju's founder aims to raise ₹500-600 crore by March through asset sales and further pledging his holdings to address pending dues and navigate the company through financial challenges.
Byju Raveendran, the founder of India's edtech giant Byju's, is making unconventional and bold moves to address the company's financial challenges. Facing a cash crunch, Raveendran has pledged his family's homes in Bengaluru and an under-construction villa as collateral to secure a $12 million loan, aiming to meet the company's immediate financial needs. This comes amid Byju's efforts to sell its US-based kids' digital reading platform for approximately $400 million and ongoing legal battles with creditors over missed interest payments on a significant term loan.
Once valued at almost $5 billion, Raveendran has personally raised debts of about $400 million, pledging all his shares in the parent company. Additionally, he reinvested $800 million raised through share sales into the company, leaving him cash-strapped. Despite recent losses reported by Byju's parent firm, Think & Learn Pvt., Raveendran remains determined to steer the company through its financial challenges.
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As part of his strategy, Raveendran has called a meeting with senior management to discuss the company's liquidity situation, with a focus on raising approximately ₹500-600 crore by March to address pending employee dues, vendor payments, tax obligations, and commitments to the BCCI. Byju's founder is optimistic about securing this amount through asset sales and further pledging his holdings in Aakash or Think and Learn.
Byju's has been navigating a turbulent period, marked by accounting irregularities, alleged mis-selling of courses, and significant layoffs. The company's efforts to remedy its situation include selling assets, such as Great Learning and Epic, while also bringing in experienced leaders to strengthen its management team. The upcoming annual general meeting on December 20 will likely shed more light on Byju's plans to address these challenges and discuss key matters such as financial reports and auditor appointments.
In conclusion, Byju Raveendran's commitment to securing Byju's future is evident through his unconventional approach of pledging personal assets. The founder's determination to tide over the liquidity crunch without seeking external investor support underscores his confidence in the company's ability to recover from its current financial woes. As Byju's charts its course in the evolving edtech landscape, Raveendran's strategic decisions will undoubtedly play a pivotal role in shaping the company's future trajectory.