” Once India’s biggest edtech startup, Byju’s, can’t pay salaries ” | NewsPKOnline

BENGALURU: Indian edtech startup Byju’s is unable to pay staff because it can’t access recently raised funds due to a legal dispute with some of its investors, founder and CEO Byju Raveendran said in an email to employees on Saturday seen by Reuters.

“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.

Byju’s did not immediately respond to a Reuters email seeking comment.

Raveendran’s 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.

The company, 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.

Four of its investors – Prosus, General Atlantic, Peak XV Partners and Sofina – asked India’s company law tribunal for a stay on the rights issue, according to court documents seen by Reuters.

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.

Edtech giant Byju’s was once India’s most valuable startup, hitting a valuation of $22 billion in 2022. The Indian company has since seen a sharp reversal in its fortunes, following a series of setbacks including alleged accounting irregularities and purported mismanagement, a report by CNBC said.

Byju’s has suffered setbacks since early 2023, including its auditor resigning, lenders beginning bankruptcy proceedings against a Byju’s holding company, and a US lawsuit disputing the terms and repayment of a loan, Reuters reported.

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.