India’s loss-making giant Byju’s, earlier rated as the largest startup of India with a valuation of $22 Billion that bought its competition Ripples for $100 Million to adjust its fall in valuation size and growth as a market giant, is now facing insolvency proceedings that can lead to a complete shut down of the giant on the market. This news came to light when the company filed a petition in the court signed by its CEO Byju Raveendran, as seen by Reuters news.
This led to the commencement of the insolvency proceedings through a complaint made by the country’s cricket board over an unpaid amount of $19 million that was due on the sponsorship deal. Therefore, Byju’s all its assets have been frozen, and the Company can no longer control its board.
During the court filing, Raveendran said that the insolvency process would prove disastrous for Byju’s business. Vendors who offer vital services for maintaining Byju’s online portals will declare a default, the services will come to a halt, and so will Byju’s business.
The ed-tech firm, which has raised funding from Prosus, General Atlantic, and others, has witnessed misery in the previous months, including job losses, a cutdown in valuation, and an appointment feud with some investors who accused Raveendran of corporate governance violations. However, Byju’s has recently come out in the open to refute any vices in the alleged fraud.
For the first time, the 452-page court filing covers the possible business impact on the company. Raveendran said in his application to try to have the insolvency process dismissed that the company’s employees “shall suffer . . . and may be forced to leave the organisation”, even as he offered to pay the $70. 5 million owed to the Indian cricket board within 90 days.
One of the most prominent Indian edu-tech companies is Byju’s, which caters to over 21 countries, including the United States of America, the United Kingdom, and Canada, among others.
Popularised during the COVID-19 viral online courses, Byju’s also provides physical contact impetus coaching classes. The business has about 27,000 workers, of which 16,000 are educators.
The Karnataka High Court is expected to hear the matter Monday, and the verdict will have a major impact on the future of one of India’s most prolific startups.
