Updated March 2nd, 2024 at 22:44 IST

Byju's unable to pay staff salaries, locked funds worrying: Raveendran Byju

In an email, Raveendran blamed four of Byju's' investors for blocking access to funds raised through a rights issue.

Reported by: Business Desk
Byju Raveendran | Image:Byju Raveendran
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Byju's salaries: Emabattled edtech startup Byju's has failed to credit salaries to employees staff because the firm cannot access recently raised funds due to a legal dispute with some of its investors. This was stated by founder and CEO Byju Raveendran in an email to employees on Saturday.

"I regret to inform you that we will still be unable to process your salaries. Last month we faced challenges due to a lack of capital and now we are experiencing a delay despite having funds," Raveendran said, adding he aimed to pay February salaries, which were due on March 1, by March 10.

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The firm Byju's did not immediately respond to the wire agencies email seeking comment. Raveendran Byju, who is facing a look out circular by the Enforcement Directorate (ED), in an email blamed four of Byju's' more than 150 investors for blocking access to funds raised through a rights issue that was completed on February 28. Byju's , whose services range from online tutorials to offline coaching, has not said how much the issue raised. It said in January it planned to raise $200 million to clear its "immediate liabilities" and for other operational costs.

Among the Buju's investors, four major ones, Prosus, General Atlantic, Peak XV Partners and Sofina, has asked the National Company Law Tribunal (NCLT) for a stay on the rights issue, according to court documents.  In response, the National Company Law Tribunal of India told Byju's to keep the funds raised in a separate escrow account and not withdraw them until the matter was settled.

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Byju's has suffered setbacks since early 2023, including its auditor resigning, lenders beginning bankruptcy proceedings against a Byju's holding company, and a U.S. lawsuit disputing the terms and repayment of a loan. The company was once one of India's hottest startups and valued at $22 billion in 2022. Last month, investors including Prosus and Peak XV, voted to oust Byju Raveendran on governance, financial mismanagement and compliance issues. Byju's has called that move invalid. 

(With Reuters inputs)

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Published March 2nd, 2024 at 22:44 IST