Byju Raveendran takes a loan of $12 million with his 2 houses and a villa in Bengaluru as collateral security
Byju Raveendran, the founder of the prominent Indian edtech company Byju’s, has committed his residence, along with those owned by his family members, as collateral to generate funds for compensating employees amidst the company’s financial challenges.
Specifically, two residences owned by the former billionaire’s family located in Bengaluru, southern India, and his under-construction villa in Epsilon, an upscale gated community in the city, were utilised as collateral to secure a $12 million loan. The borrowed funds were subsequently allocated to meet the salary obligations of 15,000 employees within Byju’s parent company, Think & Learn Pvt., on the preceding Monday.
The USA based kid’s digital learning platform is currently up for sale at a valuation of $400 million. Concurrently facing financial challenges, the company is entangled in a legal dispute with creditors due to a failure in meeting interest payments on a term loan. Once in the limelight for its rapid ascent, the company is now heavily burdened by debt, with the founder himself reportedly accountable for around $400 million.
Over the past year, the edtech firm has undergone significant downsising, resulting in numerous layoffs, particularly within its affiliated companies, WhiteHat Jr, and Toppr. In September, a reduction in the workforce by 11 percent, affecting approximately 4,000 employees, was announced. Under the leadership of CEO Arjun Mohan, Byju’s has initiated extensive restructuring efforts with the objective of simplifying operational structures, reducing costs, and enhancing cash flow. The company finds itself in a delicate position, torn between fulfilling obligations to lenders for timely repayments and the imperative to secure additional capital through fundraising endeavours.
Also read: Byju’s valuation trimmed from $22 bn to under $3 bn, slashed by Prosus Ventures
