Cash Crunch: Byju’s founder mortgages home in last-ditch move to pay salaries to staff

Byju Raveendran, founder of edtech giant Byju’s, has now mortgaged his home as well as those owned by his family members to raise money for paying staff as the company battles a fund crunch, according to people familiar with the development. Two houses owned by the former billionaire’s family in Bengaluru and his under-construction villa in Epsilon – a plush gated community in the city – were offered as collateral assets to borrow $12 million, the people cited above said. The startup used the funds to pay salaries to 15,000 employees in Byju’s parent firm, Think & Learn Pvt., on Monday. Raveendran has been adopting desperate measures to keep his company afloat and to ease the immense financial crisis that has engulfed the edtech firm for some time now. Once, well known as India’s most valuable tech startup, the firm is in the process of selling its US-based kids’ digital reading platform for about $400 million. It is also locked in a legal battle with creditors over a missed interest payment on a $1.2 billion term loan. Raveendran, whose net worth was once valued at almost $5 billion, has raised debts of about $400 million on a personal level, pledging all his shares in the parent company, according to the people. He also put back into the company the $800 million he raised through share sales in the past couple of years, leaving him cash-strapped, they said. Last month, Byju’s published its first results in years, which showed losses at Think & Learn narrowed marginally amid a pandemic-era boom in business. After an Indian federal agency concluded a probe into the startup’s overseas fundraising, penalties, if any, are expected to be nominal, the company said in a statement last week.