In order to raise funds for paying staff, Byju Raveendran has pledged both his own residence and those of his family members.
According to those familiar with the situation, Byju Raveendran, the founder of the eponymous Indian edtech company Byju’s, has pledged his home and those owned by his family members in order to gather money for paying staff during the company’s financial difficulties.
The persons, who wished to remain unnamed since the material is private, claimed that the former billionaire’s family’s two Bengaluru, southern India, properties and his unfinished mansion in Epsilon, a posh gated community, were given as security for a $12 million loan. According to the business, the money was utilized on Monday to pay the salaries of 15,000 workers at Byju’s parent company, Think & Learn Pvt.
When asked for remarks, Raveendran and Byju’s representatives remained silent.
In an effort to relieve the company’s financial strains and keep it viable, the founder has been going all out. The company, which was once the most valued software startup in India, is currently selling its kids’ digital reading platform, which is situated in the US, for roughly $400 million. In addition, it is embroiled in a lawsuit with creditors over the failure to make interest payments on a $1.2 billion term loan.
According to the people, Raveendran, who was once valued at over $5 billion, pledged all of his parent business shares to finance around $400 million in personal debt. They argued that he was cash-strapped because he invested the $800 million he had raised via share sales back into the company.
In the midst of a pandemic-era economic boom, Byju’s reported its first profits in years last month, showing that losses at Think & Learn slightly narrowed. Additionally, a federal body in India completed its probe into the startup’s foreign fundraising. The business indicated in a statement last week that any penalties would likely be minimal.