The three cases against Byju’s were filed by publisher McGraw Hill, BPO service provider Cogent, and automation control products supplier AG Automation
Byju’s parent company, Think and Learn Pvt Ltd, is facing financial trouble and is being sued by several creditors. The National Company Law Tribunal (NCLT) on May 22 issued notices to Think and Learn in three cases over non-payment of dues to operational creditors, according to a Moneycontrol report.
The three cases were filed by publisher McGraw Hill, BPO service provider Cogent, and automation control products supplier AG Automation.
Byju’s is in involved in litigation with at least seven vendors in NCLT amid an acute financial crisis.
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Byju’s owes McGraw Hill Rs 1.43 crore and Cogent about Rs 6 crore. The NCLT has given Byju’s two weeks to respond and the creditors one week to file a rejoinder.
The hearing in the cases is scheduled for July 3.
This comes a day after Moneycontrol reported that a group of employees have appointed a lawyer and plan to knock on the doors of NCLT to demand their dues from Byju’s.
Byju’s has yet to comment on these latest developments.
Recently, Byju’s founder Byju Raveendran’s net worth has fell to zero, as revealed in the Forbes Billionaire Index 2024. Last year, his net worth stood at $2.2 billion (nearly Rs 17,545 crore).
Forbes said, “Only four people from last year’s list dropped off this time, including former edtech star Byju Raveendran, whose firm Byju’s was enveloped in multiple crises and its valuation was marked down by BlackRock to $1 billion, a fraction of its peak $22 billion valuation in 2022.”
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The Byju’s Rollercoaster Ride
Established in 2011, edtech giant Byju’s quickly gained prominence and became India’s most-valuable startup when its peak valuation touched $22 billion in 2022.
The company, which was Byju Raveendran’s brainchild, revolutionised the education sector with its innovative learning app, serving students from primary school to MBA aspirants. However, recent financial disclosures and growing controversies have severely impacted the company’s fortunes.
In April 2023, as a major setback, Byju’s faced the heat of the anti-money laundering agency Enforcement Directorate. The ED’s recent searches, as per the agency, led to the seizure of various ‘incriminating’ documents and data.
Following this, in May 2023, BlackRock cut its valuation to about $8.4 billion.
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The challenges deepened as the company became evident with the release of Byju’s overdue financial results for the fiscal year ending March 2022, which unveiled a substantial net loss surpassing $1 billion.
Subsequently, in November 2023, Byju’s also said it trimmed its operating losses by 6 per cent in 2021-22 for its core online education business, while revenue more than doubled.
During the month, Byju’s was sent a show-cause notice by the Enforcement Directorate for an alleged Rs 9,362.35 crore violation under the Foreign Exchange Management Act (FEMA).
Following this, in November, tech investor Prosus NV substantially cut Byju’s valuation to under $3 billion, 86 per cent less than its peak valuation of $22 billion in 2022. The valuation was significantly cut due to the company’s struggle with governance and cashflow problems.
Finally, in January 2024, BlackRock slashed Byju’s valuation by 95 per cent to $1 billion. The valuation cuts came amid media reports that Raveendran pledged his homes for funds to pay staff, following the exit of several Byju executives and board members, prompted by a delay in the company filing its 2021/22 financial results.
