Byju Raveendran to meet senior management as liquidity situation turns precarious, banks on borrowings, asset sale

Byju Raveendran, co-founder of Byju's

Byju Raveendran, the founder of the embattled edtech unicorn Byju's, has called a meeting with the firm's senior management to apprise them of the business and liquidity situation and rally support as he navigates precarious business circumstances.

Sources said the meeting will likely be held on December 5 after which more clarity is expected on the company's current liquidity situation.

"Byju's needs 500-600 crore of cash by March to pay off pending employee dues, vendors, the tax department, and the BCCI. Byju is confident of bringing this in on the back of asset sale and by pledging his holdings in Aakash or Think and Learn if needed," a person familiar with the development said on condition of anonymity.

A second person added that Byju has been borrowing from family, friends, and other entrepreneurs in recent months to pay salaries and vendors, as the company is falling short of Rs 60-70 crore every month, even as it has brought its costs down. For instance, its wage bill used to be higher than Rs 300 crore a year ago but has now come down to Rs 130 crore.

At the height of the funding and pandemic-led edtech boom in 2020-2021, Byju's aggressively raised funds and acquired companies. It made a record 22 acquisitions in India as well as overseas, as it sought to expand from K-12 (kg to class 12) to categories such as test prep, higher learning, and coding. Byju is now counting on selling some of these assets to raise money and keep operations going at its core India edtech business.

"The company needs 500-600 crore to take care of older liabilities. The Epic sale will take care of it and will close in 45 days. There is also an option to sell other assets, apart from Byju's holding in Aakash," a second person said.

"Total liabilities put together is less than 100 million. There is no need to raise this from investors."

While Byju Raveendran has been apprising investors of the business situation, Moneycontrol learns that he is confident of tiding over the liquidity crunch without their help. "There is no term sheet at this point and no question of Byju stepping aside. He has been putting in money in the last eight-nine months for the company to stay afloat," a third person said.

These developments come at a time when the embattled edtech company has also called for an annual general meeting (AGM) on December 20.

At the AGM, the company plans to discuss multiple matters, including approving the audited FY22 financials with the report of the board, and the appointment of MSKA & Associates as statutory auditors for a five-year term.

The meeting will also include a special discussion involving approval of a remuneration of Rs 5,00,000 for each of the financial years 2021-22, 2022-23, and 2023-24 for B Y & Associates, the cost auditors.

Byju's, which is India's most-valued startup, has been under fire since the start of 2022 for a range of issues, including accounting irregularities, alleged mis-selling of courses, and mass layoffs.

The company has laid off thousands of employees in the last 12 months as it battled a double blow of drying venture capital funding and slowing demand for online learning services. Since then, its investor board members have left too, citing differences with Raveendran.

The company has tried to fix some of the problems since then. Its early investor Ranjan Pai ploughed in the capital, it set up an advisory council with veterans such as Mohandas Pai and Rajnish Kumar and elevated Arjun Mohan  as CEO. It is also in talks to divest assets such as Great Learning and Epic.