Byju's founder pledges home for loan amid salary payment challenges: Report

Byju's crisis: Byju Raveendran, the founder of edtech giant Byju's, is reportedly leveraging his family's properties to address financial challenges facing the company. In an effort to pay employees amid cash flow constraints, Raveendran pledged two family homes in Bengaluru and an under-construction villa in Epsilon, a high-end residential enclave, as collateral to secure a $12 million loan, sources revealed anonymously due to the information's confidentiality.

The substantial loan facilitated the payment of salaries to around 15,000 employees within Byju's parent firm, Think & Learn Pvt., offering temporary relief during the company's financial turmoil.

Struggling to stabilise the company's financial standing, Raveendran has taken various measures. Notably, Byju's, previously valued as India's most lucrative tech startup, is in the process of selling its U.S.-based kids' digital reading platform for approximately $400 million. Additionally, the company is embroiled in a legal dispute with creditors over a defaulted interest payment on a $1.2 billion term loan.

Facing substantial personal financial strain, Raveendran, formerly valued at nearly $5 billion, has incurred personal debts of around $400 million by pledging all his shares in the parent company. Furthermore, he reinvested $800 million from share sales back into the company over the past few years, leaving him in a cash-tight situation, sources disclosed.

Byju's recently disclosed its financial results, showing a slight narrowing of losses at Think & Learn amidst a surge in business amid the pandemic. The startup also addressed an investigation by an Indian federal agency regarding its international fundraising, expecting nominal penalties if any, as stated in a company announcement last week.

- With inputs from agencies

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