CAN BYJU'S SURVIVE THE CRISIS?

ONCE THE MOST-VALUED EDTECH FIRM IN THE WORLD, BYJU'S IS NOW BATTLING SERIOUS FUNDING ISSUES, A CORPORATE GOVERNANCE CRISIS AND COURT BATTLES. THE FIRM WILL HAVE TO URGENTLY RAISE AT LEAST $1.5 BILLION AND SET ITS HOUSE IN ORDER. CAN IT SUCCEED?

- BINU PAUL, BHAVYA KAUSHAL & KRISHNA GOPALAN

THIS JUNE, BENGALURU’S real estate circles rippled with talk of Byju’s delaying payment of rent. Was India’s most valued edtech company planning to vacate acres of office space? Byju’s corporate entity, Think & Learn Pvt. Ltd, had taken three leased properties, the largest being Kalyani Tech Park in Brookefield— spread over half a million sq. ft—that had a monthly rent of ₹3 crore.

At the end of July, Byju’s pulled out of most of Brookefield, telling its staff to work from home or other offices. An executive at a top property consultant confirmed that Byju’s had been falling back on rents before the pullout. “I guess it was coming,” he says.

Delayed rents were not the first warning sign. Byju’s had been falling back on statutory payments such as employees’ provident fund. It had reduced its headcount from 58,292 in March 2022 to 24,787 by May 2023, according to PrivateCircle Research, a private market intelligence platform.

Then Byju’s statutory auditor walked out, and so did three members of Byju’s board representing its investors. G.V. Ravishankar (of Peak XV Partners), Vivian Wu (The Chan Zuckerberg Initiative), and Russell Andrew Dreisenstock (Prosus NV) quit the board, citing “differences” with Founder Byju Raveendran. The board was left with Raveendran, wife Divya Gokulnath, and brother Riju Ravindran.

Deloitte Haskins & Sells, the company’s auditor, which has a five-year mandate up to 2025, said it had no clarity on when Byju’s planned to finalise its 2021-22 accounts or even fix issues it had raised about the accounts for 2020-21.