Amidst an impending NCLT hearing spurred by investor discontent, Byju’s disburses partial salaries, paying teachers and lower-level staff in full while others receive 50 to 100 percent of their March dues.
As the National Company Law Tribunal (NCLT) hearing looms on Tuesday, edtech giant Byju’s has reportedly disbursed partial salaries to its employees for the month of March. Sources revealed that Byju’s founder and CEO, Raveendran, has personally raised debt to fulfill part of the March payroll obligations.
According to sources, teachers and staff at lower levels have received their full salaries, while others have been paid between 100 to 50 percent of their dues for March. This development comes just before the NCLT hearing scheduled for April 23, concerning an oppression and mismanagement plea filed by four investors of Byju’s.
The plea, filed by Peak XV Partners, Prosus NV, General Atlantic, and Sofina SA, contests Byju’s decision to raise a USD 200 million rights issue. In response, Raveendran reportedly resorted to personal debt to meet payroll requirements amidst the ongoing legal proceedings.
The funds raised from the recent rights issue are currently held in an escrow account per NCLT orders until the resolution of the aforementioned case. Byju’s aims to ensure salary payments for all employees, prioritizing teachers and teaching support staff, who are deemed essential to the company’s operations.
However, some staff members’ salaries for the second half of February remain outstanding. Byju’s had previously disbursed a portion of pending salaries for all employees for February in mid-March, with a promise to settle the balance once access to funds from the rights issue is permitted.
Over the past 12 months, Byju’s has faced significant challenges, resulting in layoffs of over 10,000 employees. These challenges include a slowdown in demand for online learning services and a downturn in venture capital funding. Consequently, several investors have departed, citing disagreements with Raveendran.
In an attempt to address these issues, Byju’s has taken steps to rectify its course. Early investor Ranjan Pai injected additional capital into the company and established an advisory council featuring industry veterans such as Mohandas Pai and Rajnish Kumar.
Despite these efforts, the company continues to grapple with financial constraints and legal challenges, reflecting the broader uncertainties facing India’s edtech sector. Byju’s, once hailed as a unicorn success story, now finds itself navigating turbulent waters as it seeks to restore investor confidence and stabilize its operations.
The outcome of the NCLT hearing and Byju’s ability to address its financial and managerial challenges will likely have far-reaching implications for the company’s future trajectory and the broader landscape of India’s burgeoning edtech industry. As stakeholders await the tribunal’s decision, the edtech giant faces a pivotal moment in its journey towards sustainability and growth.
The saga surrounding Byju’s financial woes and legal battles underscores the volatility and complexity of India’s edtech landscape. With mounting pressure from investors and regulatory scrutiny, the company faces a critical juncture in its journey. As it navigates through these challenges, Byju’s must prioritize transparency, accountability, and strategic decision-making to regain trust and chart a sustainable path forward. The outcome of the NCLT hearing will undoubtedly shape the company’s trajectory and influence the broader edtech ecosystem in India.