 "Byju Raveendran said to have infused Rs 4,000 cr of own money in firm")
Byju Raveendran, founder of the edtech firm named after him, has in the last few months put around Rs 4,000 crore of personal capital into the company that is battling challenges, including securing fresh capital, delays in financial reporting, and legal disputes with lenders.
“Raveendran has pledged personal property to help the company deal with the crisis,” said a person familiar with the matter. “He told employees that everyone thinks he is a billionaire, but he has invested a major chunk of his wealth back into the company.”
In a meeting attended by some 50 senior executives on December 5, Raveendran discussed the company’s challenges and expressed confidence to overcome them in three months.
Raveendran likened the company’s situation to a war on multiple fronts. “A true entrepreneur is a war leader,” he said, according to the person who attended the meeting. “We have won many battles, but we have to win some more. As your commander, I hope with all my heart, that you will now rise and fight alongside me,” he was quoted as saying in a speech.
“He acknowledged that Byju’s has not overcome all the challenges and is not yet back to its previous state, but assured the team that the company is in better shape than it was six months ago,” said the person.
Raveendran said that the challenges became worse around June-July and he could have given up then. However, he refused to quit, saying he is fighting for the entire Byju’s team and millions of students they serve.
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“Despite the personal sacrifices he has made, including putting his personal wealth back in the company, Byju (Raveendran) said he remains dedicated to rebuilding Byju’s,” said a person.
Raveendran discussed the major challenges that the company is facing. The first challenge is the litigation surrounding Term Loan B (TLB), which stems from a delayed audit and demands for a full refund from TLB lenders. Byju’s is in negotiations with the lenders and this challenge should get resolved after the sale of Epic, a subsidiary of the company in the US. That sale will also help manage the liquidity crunch the company is facing now.
Byju's is locked in a dispute with lenders in the US over a missed interest payment on a $1.2 billion TLB. The company has put two key assets — Epic and Great Learning — on the block to generate between $800 million and $1 billion in cash to address financial challenges, according to sources.
A FY23 statutory audit is on track to be completed soon, said Raveendran. Another challenge was litigation surrounding the Davidson Kempner (DK) loan raised against Aakash Educational Services Limited (AESL). This has been resolved, with Manipal Education and Medical Group chairman Ranjan Pai taking over the loan. He also said that Aakash is now set for a record-breaking admissions season.
Pai has invested $168 million (Rs 1,400 crore) in Byju’s’ test-prep subsidiary AESL, according to the sources. They said that Pai is in discussions to invest about $350 million as equity and debt in Byju's.
Raveendran emphasised the importance of finding ways to mitigate the impact of these challenges and urged employees to play a vital role in maintaining business momentum.
Byju’s plans
Arjun Mohan, chief executive officer of Byju’s, gave a presentation at the December 5 meeting about the company's plan to increase productivity. This includes incorporating the latest developments in technology, particularly in the field of artificial intelligence, to all aspects of business, including product, sales, and marketing. The plan revolved around better monetizing the existing assets and offering more options across price points and product ranges to potential customers of Byju’s. Mohan also expressed his complete confidence in the ability of Byju’s Tuition Centres (BTCs) to generate cash profitably and push the frontiers of hybrid education.
At the end of the presentation, Raveendran apologized for not giving much face time to the team lately, acknowledging that this has been no ordinary year.
“Many members of the team thanked Byju (Raveendran) for the perseverance he has shown through the past 18 months,” said the person. “He concluded by assuring that in a few months, Byju’s will be back to ‘the heights where it belongs.’”
Netherlands-based tech investor Prosus NV has marked down Byju’s valuation to under $3 billion. This is 86 per cent less than its peak valuation of $22 billion last year. The Enforcement Directorate (ED) recently also issued a show cause notice of Rs 9,362 crore to Think & Learn, and its founder Byju Raveendran for alleged violations of forex rules while attracting foreign investments from 2011 to 2023.