Raveendran puts Rs 4K cr own wealth into Byju’s

Byju Raveendran, founder of educational technology (edtech) firm Byju’s, has injected around Rs 4,000 crore of personal capital into the company in recent months.

This move comes as the company grapples with challenges, including securing fresh capital, delays in financial reporting, and legal disputes with lenders.

“Raveendran has pledged personal property to assist the company in dealing with the crisis.

“He conveyed to employees that despite perceptions of being a billionaire, he has reinvested a major portion of his wealth back into the company,” said a person familiar with the matter.

During an interactive leadership huddle on December 5, attended by close to 50 leaders, Raveendran addressed the current challenges facing Byju’s.

He shared the difficulties the company is currently navigating but also expressed confidence in Byju’s ability to overcome them in the next three months.

Raveendran likened the current situation to a “war on multiple fronts” and as “commander” called on everyone to “rise and fight” alongside him for their present and future.

Attendees noted Raveendran’s commitment to transparency, emphasising that he no longer sugarcoats his words.

He acknowledged that while Byju’s has not completely overcome all challenges, it is in a better state than six months ago.

In his speech, Raveendran highlighted the challenges intensifying around June-July.

Despite considering giving up, he remains dedicated to fighting for the entire Byju’s team and the millions of students they serve.

“He remains dedicated to rebuilding Byju’s despite the personal sacrifices he has made, including putting his entire personal wealth back into the company,” mentioned a source.

Raveendran discussed major challenges, including litigation related to term loan B and ongoing negotiations with lenders.

He anticipates resolution after the sale of Epic, a subsidiary in the US, which will also alleviate the current liquidity crunch.

Byju’s is locked in dispute with lenders in the US over a missed interest payment on a $1.2 billion term loan B.

To address financial challenges, Byju’s plans to sell two key assets — Epic and Great Learning — for $800 million-$1 billion, according to sources.

Raveendran highlighted the closure of the ongoing 2022-23 statutory audit and successful resolution of litigation surrounding the Davidson Kempner loan against Aakash Educational Services (AESL).

Ranjan Pai, chairman of Manipal Education and Medical Group, has taken over the loan, with discussions for further investment in Byju’s ongoing.

Pai has invested $168 million (Rs 1,400 crore) in beleaguered edtech firm Byju’s’ test-prep subsidiary AESL, according to sources.

They said that Pai is in discussions to invest about $350 million as equity and debt in Byju’s.

The current challenge involves resource optimisation to achieve group-level profitability.

Raveendran expressed unwavering belief in the potential for innovation and growth even during challenging times.

Byju’s 2.0

Following this, Arjun Mohan, chief executive officer, outlined the company’s plan to boost productivity.

This includes incorporating the latest developments in technology, particularly in artificial intelligence, across all aspects of business, including product, sales, and marketing.

The plan focuses on better monetising existing assets and offering more options across price points and product ranges to potential customers of Byju’s.

Mohan expressed complete confidence in Byju’s Tuition Centres to generate cash profitably and push the frontiers of hybrid education.

Towards the end of the presentation, Raveendran apologised for not being able to give much face time to the team lately, acknowledging that this has been no ordinary year.

“Many team members thanked Raveendran for the perseverance he has shown over 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, reflecting an 86 per cent decrease from its peak valuation of $22 billion last year.

The Enforcement Directorate recently issued a show cause notice of Rs 9,362 crore to Think & Learn and its founder Byju Raveendran for alleged violations of foreign exchange rules while attracting foreign investments from 2011 to 2023.

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