Byju’s postpones January salaries of employees, cites liquidity woes

Despite the edtech company’s assurance in December that salaries would be credited on the first day of each month, there has been a delay in the disbursement.

Also read: ‘Needed to fill gaps in internal systems…’: Nirmala Sitharaman explains how LIC was prepared for IPO

“There is a slight delay in salary disbursements this month because of the artificially induced crisis by these select investors,” the email read.

The postponement of salary disbursement occurred shortly after the request from investors for an extraordinary general meeting (EGM) to address resolutions concerning governance, financial mismanagement, and compliance matters.

The company, however, reassured its employees that the salaries would be paid in a phased manner starting today (February 2) and would be completed by Monday (January 5). According to the email, Byju Raveendran, founder and CEO of Byju’s, has pledged his only home to ensure the financial security of the company. 

Also read: Mahindra Group appoints Amarjyoti Barua as Group CFO

Recently, the edtech firm announced its intention to secure funding through a rights issue, aiming for a post-money valuation of $225 million. Notably, this valuation represents a staggering 99 percent decrease compared to the company’s previous funding round, wherein it was valued at an impressive $22 billion.

Investors further advocated for restructuring the Board of Directors to ensure that it is no longer under the exclusive control of the founders of Byju’s parent company, Think & Learn. Additionally, there was a call for a shift in leadership.

Byju’s, once hailed as India’s most valuable startup, has encountered a series of challenges since the onset of 2022, including issues related to accounting irregularities, alleged mis-selling of courses, and substantial layoffs.

Also read: Tata Motors Q3 preview: Standalone revenue, PAT may come softer QoQ; JLR may deliver better operating margins

Over the past 12 months, the company has implemented significant workforce reductions, grappling with the dual challenges of diminishing venture capital funding and a slowdown in the demand for online learning services. Consequently, key members of its investor board have departed, citing disagreements with founder Raveendran.

In response to these challenges, Byju’s has taken steps to address some of the issues. Early investor Ranjan Pai injected additional capital, an advisory council comprising industry veterans such as Mohandas Pai and Rajnish Kumar was established, and Arjun Mohan was promoted to the role of CEO. Additionally, the company is in discussions regarding the potential divestment of assets such as Great Learning and Epic.

Milestone Alert!
Livemint tops charts as the fastest growing news website in the world 🌏 Click here to know more.

Here’s your comprehensive 3-minute summary of all the things Finance Minister Nirmala Sitharaman said in her Budget speech: Click to download!

Published: 02 Feb 2024, 04:30 PM IST