BYJU’S US Arm Files For Bankruptcy Amid Shareholders Call For Leadership Change, Rejig Board

Beleagured edtech major BYJU’S has filed for Chapter 11 bankruptcy proceedings in the court of Delaware via its US subsidiary, BYJU’S Alpha, listing liabilities in the range from $1 Bn to $10 Bn.

According to a court filing, BYJU’S Alpha unit listed its assets in the range of $500 Mn to $1 Bn, which showed estimated creditors in the range of 100 to 199, Reuters reported.

This development comes at a time when major investors in the edtech giant are contemplating an extraordinary general meeting (EGM) to overhaul its board and leadership.

Currently, BYJU’S board comprises Byju Raveendran and family members Divya Gokulnath and Riju Raveendran. Last year, three board members, namely Russell Dreisenstock of Prosus, Vivian Wu from Chan Zuckerberg Initiative, and GV Ravishankar from Peak XV Partners, resigned.

In December last year, Code.org, a non-profit organisation in the US, initiated legal action against BYJU’S subsidiary WhiteHat Jr in the California district court, alleging non-payment of required fees for platform usage.

BYJU’S recently commenced a $200 Mn rights issue to secure fresh capital at a post-money valuation of $225 Mn, representing a substantial 99% decline from its previous valuation of $22 Bn. In November last, Dutch investor Prosus devalued its stake in BYJU’S, lowering the valuation to under $3 Bn.

In the financial statements filed for FY22 earlier this month, almost 22 months after the fiscal year’s conclusion, BYJU’S revealed an 81% surge in consolidated net losses, reaching INR 8,245.2 Cr in FY22 from INR 4,564.3 Cr in FY21. Operating revenue, driven mainly by improved performance from Aakash, rose over 120% year-on-year to INR 5,014.6 Cr.

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