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Byju’s considering sale of Great Learning and Epic to settle $1.2 billion term loan

The company has put two of its group firms — higher education platform Great Learning and kids-focused digital reading platform Epic – on sale to raise immediate funds to meet the repayment obligations towards the $1.2 billion of Term Loan B it availed from a consortium of US-based creditors, sources close to the development said.

The capital will go towards completely paying off the term loan

Troubled edtech major Byju’s is engaging with potential suitors to sell two of its key assets, even as it awaits the long elusive fresh equity funding to pay off debts.

“They have been exploring many options, but the most feasible one at this point looks like an asset sale. They hope to make around a billion dollars from these two firms,” said one of the people on condition of anonymity.

Byju’s acquired Great Learning for $600 million and Epic for $500 million in cash and equity deals in July 2021. These deals were part of a series of acquisitions the company made in 2021 as digital education grew exponentially due to Covid-related restrictions. During the hyper-growth years of 2020-2021, the Bengaluru-based company made approximately $3 billion worth of acquisitions.

Though it raised significant amount of capital during the time, the equity capital wasn’t enough to fund the extravagant acquisitions, especially as it continued to burns cash on operations. Byju’s then turned to large debt providers in the US to raise a massive term loan.

The TLB, secured for a five-year period at a yield to maturity (YTM) of 6.78 per cent in November 2021, came back to bite the company in June of this year when it missed a $40 million loan repayment. It subsequently filed a lawsuit against its lenders, countering their legal actions, accusing them of using predatory tactics.

As per people in the know of the development, lenders were renegotiating the rate to be around 10-11 percent. This would mean that the company has to set aside $100-120 million dollars from its cash flow each year to meet these new terms.

Source: https://www.businesstoday.in/entrepreneurship/start-up/story/byjus-considering-sale-of-great-learning-and-epic-to-settle-12-billion-term-loan-397948-2023-09-11

In fresh round of layoffs, edtech giant Byju’s lets go of 100 employees

Last year, Byju’s laid off about 600 at its group companies – WhiteHat Jr and Toppr. It said this was a move to drive cost efficiency

Byju’s has handed the pink slip to 100 employees in a fresh round of layoffs, post a performance review. However, according to a media report, the edtech company has sacked about 400 people.

“As part of a periodical performance review, 100 individuals who did not meet expectations after a performance improvement plan, were let go with proper procedures,” said the Byju’s spokesperson.

He added, “Please note, this measure is firmly rooted in performance-based considerations and is not in any way a cost-cutting endeavour.”

Byju’s also said that there are no fresh layoffs in the post-sale division.

“In fact, during the past two months, as part of our commitment to augment this division, Byju’s has recruited 200 new professionals,” said the spokesperson.

Earlier this year, Byju’s handed the pink slip to 900-1,000 employees in a fresh round of layoffs, according to media reports.

However, sources in the company said the move was part of the “optimisation” strategy that the edtech giant had announced last year. This included sacking 2,500 workers.

Last year, Byju’s laid off about 600 at its group companies — WhiteHat Jr and Toppr. It said this was a move to drive cost efficiency.

The new development comes at a time when Byju’s appointed veteran Infosys HR leader Richard Lobo as exclusive advisor to help transform its HR function.

This strategic move underscores Byju’s commitment to fortify its employee-centric culture.

Source: https://www.business-standard.com/companies/news/edtech-giant-byju-s-lets-go-of-employees-as-part-of-a-performance-review-123081800547_1.html

Byju’s Raveendran breaks into tears as crises engulf ed-tech startup

Byju Raveendran, founder of ed-tech startup Byju’s, reportedly broke down in tears after a probe agency raided the company’s offices, linking it to possible foreign exchange violations. The company has faced a series of crises including allegations of financial irregularities and legal battles.

Byju’s founder Byju Raveendran (MINT_PRINT)

Byju Raveendran, founder of ed-tech startup Byju’s reportedly broke down in tears in April when a probe agency raided the Bengaluru offices of the company and linked the world’s most valuable education-technology startup with possible foreign exchange violations in April this year.

An ocean away, Byju Raveendran, the firm’s eponymous founder and chief executive, paced his condo in Dubai, downing cups of black coffee and fielding calls from top investors. With a planned $1 billion equity fundraise from Middle Eastern investors still in limbo, Raveendran broke down in tears defending his company, reported Bloomberg, quoting people who attended the calls.

Crises have gripped Byju’s as once high-flying tutoring startup failed to file its financial accounts on time, skipped an interest payment on its term loan, and triggered a legal fight with its creditors. Several US-based investors accused Byju’s of hiding half a billion dollars, prompting lawsuits.

Allegations against Byju’s
Yesterday trouble mounted for Byju’s as Prosus NV, an investor in the edtech startup, asserted that the company’s reporting and governance structure did not evolve sufficiently for an entity of this scale and it “regularly disregarded advice” by the Dutch-listed firm.

“Despite repeated efforts from our director, executive leadership at Byju’s regularly disregarded advice and recommendations relating to strategic, operational, legal, and corporate governance matters,” it said.

This year, Prosus slashed the valuation of Byju’s to $5.1 billion from $22 billion last year.

Raveendran’s rise from a private tutor to the leader of a $22 billion company captivated global investors, including Sequoia Capital, Blackstone Inc., and Mark Zuckerberg’s foundation. The firm ordered a majority of the ed-tech market during the Covid pandemic.

But after classrooms reopened, concerns about Byju’s finances pricked at the firm’s reputation. Investors questioned why Raveendran delayed hiring a chief financial officer for years and acquired more than a dozen companies across the world at break-neck speed. Scores of employees have either left or been fired. Board members have resigned. And many teaching centers are nearly empty, Bloomberg reported.

What critics say
Raveendran’s closed one attributed missteps to the enthusiasm and naivete of an inexperienced founder who grew too quickly. Critics say he acted recklessly by withholding information about finances and failing to rigorously audit accounts.

The rise and fall of Byju’s
Born in a small village in Kerala, Raveendran attended a local school where his father taught physics and his mother maths. After completing his school, he studied engineering.

Raveendran began coaching students at a college in Bengaluru. Enrollment doubled every week, and Raveendran eventually moved classes into a sports stadium. Lessons were projected onto giant screens for thousands of students.

Raveendran’s teaching methods stood out in India, where good instructors are scarce and methodologies antiquated.

Raveendran recruited his best students to teach alongside him and opened 41 coaching centers. In 2011, he registered to Think and Learn Pvt Ltd. — the parent company of Byju. He co-founded the firm with Divya Gokulnath, a biotech engineer and former student whom he later married.

In 2015, Raveendran digitized his business, launching a self-learning app focused largely on math, science, and English for primary school students.

“I’ve always enjoyed learning things on my own and also taught myself to hack exams, so it was easy to tutor others,” Raveendran said in a 2017 interview with Bloomberg News.

Source: https://www.livemint.com/companies/start-ups/byju-raveendran-broke-down-in-tears-as-crises-engulfed-ed-tech-startup-byjus-crisis-11690334761815.html