Edtech firm Think and Learn, owner of Byju’s brand, credited partial salaries of employees for the month of March, according to a PTI report citing sources. Byju Raveendran, founder and CEO of Think and Learn, has raised debt in his personal capacity to pay the salaries of employees for March.
Byju’s salary expenses for partial payouts is estimated to be in the range of Rs 25-30 crore. The salary was credited on Saturday, April 20, in the account of employees.
According to the PTI source, the amount paid is between 50-100 per cent of salary. “Byju raised more personal debt to pay salaries this month. While the rights issue money is still blocked by the foreign investors, ” a source said.
“Teachers and people at the lower end of the pyramid have been paid 100 per cent,” the source said. The company had raised USD 200 million through a rights issue to meet its operational requirements, including expenses related to employees’ salaries.
A group of four investors — Prosus, General Atlantic, Sofina, and Peak XV — along with the support from other shareholders, including Tiger and Owl Ventures, have approached NCLT against the founders as well as the rights issue which may lead to change in shareholding pattern in the company. The hearing in the matter before the court is scheduled on April 23.
“Paying salary through debt is not a sustainable model. The situation will become more complicated after the court goes on leave,” a source said.
Recently, Byju Raveendran’s net worth fell to zero, as revealed in the Forbes Billionaire Index 2024. Last year, his net worth stood at $2.2 billion (nearly Rs 17,545 crore).
Forbes said, “Only four people from last year’s list dropped off this time, including former edtech star Byju Raveendran, whose firm Byju’s was enveloped in multiple crises and its valuation was marked down by BlackRock to $1 billion, a fraction of its peak $22 billion valuation in 2022.”
Established in 2011, edtech giant Byju’s quickly gained prominence and became India’s most-valuable startup when its peak valuation touched $22 billion in 2022.
The company, which was Byju Raveendran’s brainchild, revolutionised the education sector with its innovative learning app, serving students from primary school to MBA aspirants. However, recent financial disclosures and growing controversies have severely impacted the company’s fortunes.
In April 2023, as a major setback, Byju’s faced the heat of the anti-money laundering agency Enforcement Directorate. The ED’s recent searches, as per the agency, led to the seizure of various ‘incriminating’ documents and data.
Following this, the company’s valuation was cut multiple times by investors. Most recently, in January 2024, BlackRock slashed Byju’s valuation by 95 per cent to $1 billion.
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