Unable to pay salaries, BYJU’s founder pledges for loan against home

A show cause notice by ED was issued to Byju Raveendran and Think and Learn Pvt Ltd over alleged foreign exchange violations, last month.

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Courtesy: Byju's

Byju Raveendran, the founder of BYJU’s that has revolutionised the edtech industry, has pledged his own property as well as those owned by his family members in order to gather money for paying staff during the company's liquidity crunch.

The former billionaire's family's two Bengaluru residences and his unfinished villa in the upscale gated enclave of Epsilon were presented as collateral for a $12 million loan, according to sources who asked to remain anonymous since the details are private.

According to them, the startup utilised the money to pay the salaries of 15,000 workers at Think & Learn Pvt., Byju's parent company, on Monday.

Not only this, the founder has also been pulling all stops in his fight to keep the company surfaced and to ease its financial pressures. It is to be noted here that the platform which was among India's one of most valuable tech startup, is in the process of selling its US-based kids' digital reading platform for about $400 million, which is also locked in a legal battle with creditors over a missed interest payment on a $1.2 billion term loan, as er sources. 

Byju's, once worth almost $5 billion, raised debts of about $400 million pledging all his shares and the parent compnay, as per sources. It is also to be noted here that last month, the edtech company published the final year results, which left the company cash-strapped.

Meanwhile, an Indian federal agency also concluded an investigation into the startup's overseas fundraising, and penalties, if any, are expected to be nominal, the company said in a statement last week.