Byju’s Founder Was Left In Tears Trying To Defend The Startup: Report

Byju’s Founder Was Left In Tears Trying To Defend The Startup: Report

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When ed-tech startup Byju’s was raided by Indian officials in Bengaluru in April this year on possible foreign exchange violations, founder Byju Raveendran was helplessly pacing his condo in Dubai, taking calls from top investors, trying to defend his company.

The founder broke down in tears, as per a report by Bloomberg, trying to fight yet another crisis, after the tutoring startup failed to file its financial accounts on time, skipped an interest payment on a term loan, and ended up in a legal fight with its creditors. Multiple investors have accused the firm of concealing half a billion dollars, leading to lawsuits.

People close to Raveendran attribute the firm’s problems to his inexperience and naivety, while critics note that the founder acted recklessly by withholding financial information and failing to thoroughly audit accounts. 

Also Read : Parliamentary Panel Criticises Government Over Reduction In MGNREGA Budget

While Byju’s dominated the market during the pandemic, problems started brewing once classrooms opened and investors started questioning its finances, the report stated. 

Further trouble increased for the firm on Tuesday, when one of its investor, Prosus NV, asserted that the company disregarded advice and didn’t work on evolving its governance structure sufficiently. 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.

The investor slashed Byju’s valuation this year to $5.1 billion from $22 billion. Representatives from Byju’s three big investors, Peak XV, Prosus, and the Chan Zuckerberg Initiative, recently quit the firm’s board. Further, the firm’s auditor Deloitte Haskins & Sells also resigned, due to it’s spotty financial records. 

Finally, the Bengaluru-based startup caught some break earlier this week, after a committee of lenders agreed to amend a $1.2 billion term loan with the company by August 3. 

Not all is lost for the firm, as many analysts remain bullish citing the firm’s strong assets, including it’s 150 million customers. 

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