Byju Raveendran, founder of embattled edtech giant Byju’s, revealed that the mass resignation of three key investors in 2023 critically hampered the company’s ability to raise funds and exacerbated its financial struggles.
Speaking at a virtual press conference, Raveendran said that the simultaneous exit of board members from Prosus, Peak XV Partners, and the Chan Zuckerberg Initiative followed soon after US lenders declared the company in default. This, he argued, was a major turning point, making it nearly impossible to secure new funding. Raveendran claimed the situation could have been mitigated had there been a planned transition or vote for reconstitution of the board.
The resignations came after US lenders, represented by Glas Trust Co LLC, filed a case in a Delaware court, citing Byju's failure to meet loan obligations. Raveendran criticized the investors for abandoning the company at the first sign of crisis, stating they were primarily focused on financial returns and unwilling to support the company during tough times. He admitted the USD 1.2 billion term loan taken for international expansion, once considered an easy source of capital, had become a heavy financial burden as global interest rates surged and liquidity dried up.
Despite the financial difficulties, Raveendran denied any allegations of fraud, asserting that he and his family had reinvested personal funds into Byju’s. He emphasised that the company’s setbacks were not due to intentional wrongdoing but the result of a deteriorating global financial environment and liquidity issues. The founder also addressed the ongoing insolvency proceedings initiated by the National Company Law Tribunal (NCLT) after the Board of Control for Cricket in India (BCCI) filed a Rs 158 crore debt claim over an unpaid sponsorship deal. Byju’s decision to settle with the BCCI, its largest creditor, was challenged by US lenders, who accused Raveendran's brother of using tainted funds for the settlement.
Facing litigation and a mounting debt crisis, Raveendran remained optimistic about Byju's future, expressing his commitment to reviving the company. Although his hands are tied by legal proceedings in India, he pledged to return and continue his mission to transform education. Investors, including Peak XV Partners and General Atlantic, have taken legal action in the Supreme Court, further complicating Byju’s path to recovery. However, Raveendran insisted that, despite these setbacks, Byjus is not finished, and he vowed to make a comeback.
