In an email sent to BYJU’S employees, Raveendran said the company is on the brink of reversing the negative business cycle that began two years ago and ready to launch BYJU'S 3.0
The founder and CEO also claimed that the founders infused approximately INR 7,500 Cr in the company for various operational needs over the past 29 months
Raveendran said that BYJU’S failed to clear the salaries of the employees for the month of July 2024 and once again blamed its lenders for it
Troubled edtech giant BYJU’S
founder and CEO Byju Raveendran has claimed that the company is on the verge of a turnaround and investors are ready to back the firm in its journey.
In an over 1,200-word long email addressed to employees, Raveendran said that the company is on the brink of reversing the negative business cycle that began two years ago and ready to launch BYJU’S 3.0 – “an AI-driven, hyper-personalised educational platform low on cost and high on impact”.
Inc42 has accessed the email sent by Raveendran.
He said that the company has failed to clear the salaries of the employees for the month of July 2024 and once again blamed its lenders for it.
It is pertinent to note that the edtech firm has delayed salary payments for existing as well as former employees many times over the last year or so, with the founder attributing the delays to the legal proceedings initiated by BYJU’S lenders against it.
The CEO said that the founders, which include his brother Riju Raveendran and wife Divya Gokulnath, are committed to paying the salaries of the employees once the company regains access to its accounts.
Raveendran claimed that the founders infused INR 7,500 Cr in BYJU’S parent Think & Learn Pvt Ltd (TLPL) over the last couple of years.
“Over the past 29 months, TLPL’s only source of capital was the founders. Founders together have infused approximately INR 7,500 Cr in the company for various operational needs,” he claimed.
He said that the ongoing insolvency proceedings have rendered the founders of the company unable to put in their personal capital to finance the company’s operations.
“I guarantee this: When we regain control, your salaries will be paid promptly, even if that means raising more personal debt. We have investors ready to back our turnaround story. They see what I see – enormous potential and inevitable growth,” the mail said.
Raveendran claimed that out of the INR 3,976 Cr in total salaries credited to BYJU’S over the past two years, INR 1,600 Cr was infused by his brother Riju personally.
The founder claimed that Riju earned INR 3,600 Cr from secondary shares sales, which he held between May 2015 and January 2022. He added that BYJU’S used this amount to pay its dues to the Board of Cricket Control of India (BCCI) and “not a single rupee” used for the settlement was connected to the Term Loan B (TLB) raised in the US.
Commenting on the state of the company, he told the employees, “I want to remind all of you that we are still the largest edtech platform globally with 150 Mn students using our products and services every month. Despite the recent challenges faced, this organic user base has doubled over the last two years. Indeed, BYJU’S is transitioning to a sustainable business model that serves millions of students across India and employs thousands of people.”
It must be highlighted that last week Inc42 reported that BYJU’S is looking to shut 120 out of its 250 offline tuition centres amid a severe fund crunch.
BYJU’S Vs Lenders
While BYJU’S has been facing a host of issues, including delays in filing financial statements, layoffs, a severe cash crunch, multiple insolvency petitions, among others, it’s the company’s legal battle with its US-based lenders which seems to be causing the maximum troubles.
While the National Company Law Appellate Tribunal (NCLAT) set aside the insolvency proceedings initiated by the BCCI against BYJU’S after the two parties reached the settlement, the Supreme Court reinitiated the insolvency proceedings on a plea filed by Glas Trust Company, a consortium of the startup’s aggrieved US-based lenders.
This has put a question mark on the very existence of the startup.
Breaking silence on this, Raveendran said that the lenders in question are not the company’s original lenders, who had signed an agreement to get repaid in November 2026. He said they are “aggressive foreign distress funds” who are using “unlawful” ways to force the company to pay back the $1.2 Bn within 16 months of distribution.
“Until they unlawfully accelerated the loan, we were paying interest and there was no financial default. We have challenged their acceleration, pending in the New York court, which is the exclusive jurisdiction to decide all disputes under the credit agreement,” he said.
It is pertinent to note that a bankruptcy court in Delaware, US, earlier this month, ordered Riju to pay $10,000 a day until he helps locate $533 Mn that his company is accused of hiding from the US lenders.
No ED Investigation Against Founders
About six months after it was reported that the Directorate of Enforcement (ED) was looking to issue a look out circular (LOC) against the founder brothers, Raveendran unequivocally rejected the media reports.
“Contrary to what some media articles may have alleged, ED has not commenced any investigation against Riju or me in any personal capacity either,” he said.
He added that while several accusatory labels have been made against the founders, “including reckless and damaging allegations that we are ‘fugitives’”, the CEO has always been transparent about his whereabouts. Raveendran said that he has been in India for a total of 77 days since March 2023.
“… the ED investigation against BYJU’S is restricted solely to procedural deficiencies under FEMA, such as delay in filing Annual Performance Reports (APRs) with respect to duly compliant overseas investments arising from the delayed statutory audit. Contrary to what some media articles may have alleged, ED has not commenced any investigation against Riju or me in any personal capacity either,” the mail said.
