Bengaluru, December 4: Due to a serious liquidity shortage, Byju Raveendran, the founder of Byju's, has allegedly offered his under-construction mansion and the residences of his family members, valued at Rs 100 crore, in order to pay staff salaries. According to Bloomberg, two Bengaluru residences owned by Raveendran's family and his unfinished house at Epsilon, the city's most prestigious gated community, were submitted as security for a $12 million (about Rs 100 crore) loan.
According to the report, the startup utilised the money to pay the salaries of 15,000 workers at Byju's parent company, Think & Learn Pvt, on Monday, December 4. ED Raids BYJU’s Office: No FEMA Violations Found So Far After Enforcement Directorate Searches at BYJU’S Premises in Bengaluru.
Once the most valued digital business, Byju's fell into difficulties as funding stopped due to a significant valuation reduction. The investment company BlackRock reduced its March 2022 valuation of $22 billion to $8.4 billion in May of this year. In June, Prosus, a global investment company, estimated its worth at $5.1 billion.
According to the news reports, Raveendran pledged all of his parent business shares in order to raise loans of around $400 million on a personal basis. The IT pioneer also reinvested the $800 million he had collected from share sales over the previous two years.
Previously, the Business Standard revealed that On Monday, Byju's compensated around 1,000 workers with their outstanding November pay. Although Byju's claimed that a technical error occurred when uploading the information to a payroll service system, the salaries were supposed to be credited by December 1. Byju's Layoffs: Edtech Giant Planning New Round of Job Cuts To Reduce Costs, May Lay Off 1,000 Employees, Say Reports.
The company, with its headquarters in Bengaluru, has also come under fire for allegedly holding up the 'full and final' compensation for workers it fired earlier this year. In September, the company said that it would approve the settlement in the midst of "difficult business restructuring".
(The above story first appeared on LatestLY on Dec 04, 2023 10:09 PM IST. For more news and updates on politics, world, sports, entertainment and lifestyle, log on to our website latestly.com).