India's biggest education tech company is facing insolvency after its valuation crashed from $22bn (£17bn) to under $2bn (£1.5bn) due to "financial mismanagement and compliance issues".
Byju's has suffered a series of setbacks in recent months, including job cuts , a 90 per cent collapse in valuation and a tussle with investors who have accused chief executive Byju Raveendran of corporate governance lapses.
The company, backed by investors like Prosus and General Atlantic, has denied any wrongdoing.
Mr Raveendran said in a court filing that insolvency would force thousands of employees to resign and result in a total shutdown of its services, Reuters reported.
The founder, 44, lost control of the company last week after a tribunal started an insolvency process following a complaint by India’s cricket board over an outstanding payment of $19m (£14.6m) from a sponsorship deal.
Byju's assets have been frozen and its board suspended.
In a filing before the Karnataka state High Court, Mr Raveendran said insolvency would shut the startup’s operations and result in 27,000 staff, including some 16,000 teachers, losing jobs. An appeals tribunal is expected to hold a hearing on Monday.
Mr Raveendran denies allegations of mismanagement and wrongdoing at his company, which has faced several lawsuits over unpaid loans and boardroom battles with foreign investors.
But the former billionaire admitted in Davos last year to making "our fair share of mistakes" while "growing fast".
The company's employees "shall suffer”, Byju’s said in the court filing, “and may be forced to leave the organisation”.
It said the chief executive was willing to pay the outstanding dues to the Indian cricket board within 90 days.
The company is struggling to pay the salaries of its employees and has been locked out of its more than 100 tuition centres across the country for not paying rent and other bills, Inc42 reported.
Byju’s found immense success during the Covid pandemic by offering online courses. It also offers in-person coaching.
Backed by investors like General Atlantic, Prosus and Facebook founder Mark Zuckerberg ’s philanthropy venture, Mr Raveendran spent millions on a series of acquisitions. The company claims to have 150 million students in over 100 countries.
The company began facing setbacks once the pandemic restrictions were lifted and students went back to school.
As he battled crises, Mr Raveendran said decisions to lay off some of its then-50,000 employees and slash branding expenses would turn its cashflow positive.
He presented a "suave, nice and polished" image, appearing to heed advice, but "eventually there was a trust deficit", an executive who quit last year as Byju's senior vice president, told Reuters.
"He said things are improving, don't worry, we have the money," the former executive said.
The Independent has reached out to Byju’s for a comment.
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