Byju's founder mortgages homes to pay salaries to 15,000 employees

NEW DELHI: Reports claim that edtech major Byju Raveendran has pledged his home, as well as those owned by his family members, to raise money to support his workforce amid a cash crunch.

A Bloomberg report says that two homes owned by Raveendran’s family in Bengaluru, and another under-construction villa were offered as collateral to borrow $12 million to pay salaries to 15,000 employees in Byju’s parent firm, Think & Learn Pvt Ltd.

As per the report, citing sources, Raveendran, once worth almost $5 billion, has raised debts of about $400 million on a personal level, pledging all his shares in the parent company.

Byju’s did not officially comment when reached.

In an earlier statement, the company had said it was working to resolve the issue and pay the remaining employees. "We have noticed a delay in processing salary for some limited employees (less than 5 per cent) due to an unexpected technical glitch.

The issue is being rectified over the weekend and payment will be processed by Monday," said a Byju’s spokesperson.

There was a reported salary delay for about 1,000 employees.

A large percentage of users of Byju's, which had more than 15 crore users, has migrated to other apps. Apps like Unacademy and Vedantu have made gains amid Byju's downfall. Apart from school and college classes,Byju's offers classes for competitive exams like PSC, SSC, Banking and Civil Services. Employees who have resigned and left Byju's have joined other similar apps.

In the past, parents have complained against Byju's for charging too much for the courses. Other apps offer similar or better service at half the price of Byju's. While it was generally thought that the number of people using online classes would decrease with the reopening of schools, there are many who follow the hybrid learning method. Housewives constitute a large percentage of consumers.

The beginning of Byju's

In 2011, Byju Raveendran, a native of Kannur, and his wife, Divya Gokulnath, founded Byju's. Byju's confidence came from clearing the very difficult CAT exam twice without going for coaching. The institution then functioned as a tuition centre for nearby children. In 2015, with the further development of the digital technology, Byju's became an online app. It was headquartered in Bengaluru. Byjus' motto is education for all.