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Cash-strapped edtech firm Byju’s on Friday hit out at “certain investors” in an internal note addressed to employees, claiming that they are conspiring against the company and seeking the ouster of its founder Byju Raveendran at a time of crisis.
Byju’s is facing multiple challenges, including a cash crunch, delays in financial reporting and legal disputes with lenders.
“Certain investors, seeing the crisis we faced, saw it as an opportunity to conspire and demand the stepping down of our founder as the group CEO of Byju’s,” the company told employees in the note, a copy of which is with Business Standard.
“We are pained to see this action from a few of the investors who should have supported us in our fight at these challenging times, instead of directly speaking to the media. The founders are the largest investors and the greatest fighters for Byju’s,” it said.
The note comes a day after a consortium of key shareholders in Byju’s issued a notice to the company, calling for an extraordinary general meeting (EGM) to address “persistent issues”, including a proposed change of management at the firm. The company has raised a total of $5.08 billion from investors.
Over the past months, Byju’s told employees in the note, that they together weathered storms that few companies have ever faced.
It said when investors hesitated to step up during harsh macroeconomic conditions, the founders personally invested over $ 1 billion in capital to keep the company’s dream alive.
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Byju’s has not yet paid salaries for January amid a liquidity crisis, according to the sources. The firm has made a move to raise $200 million by way of a rights issue to all its equity shareholders. The company told employees that the success of the rights issue will ensure that the firm has sufficient operational capital to fund its short-term needs from March onwards.
“However, there is a slight delay in salary disbursements this month because of the artificially induced crisis by these select investors,” said the management. “As many of you know, ‘Byju sir’ (Raveendran) has personally shouldered the responsibility of paying our salaries over the past several months, including pledging his only home to ensure our financial security. This month is no different. Our salaries, let us reassure you, will be paid in a phased manner starting today and will be completed by Monday,” it said.
In three short days, since launching the rights issue, the company said it has already received commitments for more than 100 per cent of the proposed amount. The process will take 25 more days to complete.
“It will ensure we have enough growth capital, and also to meet all operational liabilities. This will mark the beginning of the final phase of our recovery. It is a testament to our steadfast determination as a team that stood tall against heavy odds. Indeed, we all stood like a rock behind our founder and played big and small parts in scripting this remarkable turnaround story,” the company said.
Byju’s told employees that it is now less than a quarter away from achieving operational profitability while acknowledging that it still has old liabilities to settle and short-term growth to secure. However, the success of this rights issue will ensure that it can adequately address these challenges, it said.
“All we need to do is fight with our leader. We have written to all the shareholders in Byju’s to express our steadfast commitment,” the firm said in the note. “In the face of negativity and doubt, we request you to ignore the noise and focus on what you do best. Stand tall, deliver exceptional work, and let our actions speak louder than any words of doubt. A wise person once said, ‘The struggle you are in today is developing the strength you need for tomorrow's success.’ We all stand by Byju’s, with Byju sir,” it added.
