Insolvency proceedings against ed-tech company Byju’s will likely force thousands of employees to quit and result in a total shutdown of its services, according to its CEO, Byju Raveendran. Byju’s, once valued at $22 billion and backed by prominent investors such as Prosus and General Atlantic, has faced a series of setbacks recently. These include significant job cuts, a collapse in its valuation, and conflicts with investors who have accused Raveendran of corporate governance lapses.
The company’s current crisis escalated when the National Company Law Tribunal (NCLT) triggered insolvency proceedings following a complaint by the Board of Control for Cricket in India (BCCI) over an outstanding payment of $19 million related to a sponsorship deal. This development poses a severe threat to Byju’s operations, potentially causing vendors who provide essential services to declare a default, which could “lead to a total shutdown of services,” according to Raveendran’s court appeal.
Byju’s, which operates in more than 21 countries, gained significant popularity during the COVID-19 pandemic by offering online courses. The company employs around 27,000 people, including 16,000 teachers. In his court filing, Raveendran expressed concern that the insolvency process might force employees to leave the organization. He also stated that the company is willing to settle the outstanding dues to the BCCI within 90 days to resolve the issue and avoid further disruption.
