The Indian Edtech Giant BYJU’S which has been struggling nowadays with liquidity and a growing negative public image was recently in the news for a possible delayed salary payment for January. However, the company’s founder came forward by issuing an official letter of crediting the salaries into its employees’ accounts. Read more for complete information
Failing to pay salaries for January
What started in the year 2011 as any other startup back then in the name of the founder Byju Raveendran, became a multi-billion dollar ed-tech giant with major investors including Sequoia Capital, Tencent, Chan Zuckerberg Initiative, Naspers, General Atlantic, and Qatar Investment Authority. The company Initially focused on test preparation for competitive exams and later expanded its offerings to cover a wide spectrum of subjects, catering to students from kindergarten to higher education. Onboarding interactive video lessons, animated content, and adaptive learning technologies. The platform employs a personalized learning methodology, tailoring the curriculum to individual student needs, and fostering a deeper understanding of concepts. BYJU’S app, accessible on various devices, has gained immense popularity, reaching millions of students globally.
What went wrong in BYJU’S
When a company the size of BYJU’S starts experiencing a downfall, questions arise ranging from the market dynamics as well as the funding winter, which means all the external reasons because it was an education platform for all sorts of age groups and subjects and looking at the population of a country like India there are millions of potential customers for the platform to onboard them. But this time the problem was internal, from harassing the sales department to acquiring foreign startups, from spending crores on advertising to covering up every subject and every course out there that a student wants. The company is already fighting lawsuits from its American creditors over hiding the funds and this time it’s in the news for failing to pay the salaries to its employees for January. We all know the early signs of a failing company with pay cuts topping the list.
Salary Processing
Amid growing speculation and reports of possible failure over payment of salaries to employees for January. In a recent communication to employees on February 4, Byju Raveendran, the founder and CEO provided updates on the disbursement of pending January salaries and addressed challenges faced by the company. Raveendran assured employees that the company has expedited the processing of all pending January salaries, with payments completed over the last two days, and emphasized his commitment to ensuring timely payroll, acknowledging the team’s dedication and the challenges involved.
Financial Struggles and Investor Crisis
The CEO acknowledged the monthly payroll expenses, standing at around Rs 70 crore, and explained that the delay was due to what he termed as an “artificially induced crisis by select investors.” This revelation sheds light on the financial struggles faced by the company, attributing the setback to external factors.
Setback for the Indian Startup Ecosystem
The Indian startup ecosystem is somewhat in turmoil as two of the heavyweights of the Indian startup ecosystem Paytm and BYJU’S have been struggling these days. Recently paytm was directed by the RBI to cease accepting deposits and granting of loans till further notice halting the activities of the fintech giant. On the other hand, BYJU’S has been struggling with lawsuits and declining valuation. All this makes us question whether the startups in India are even ready to compete with the world and whether they India ready to make startups that have strong foundations and are not just a product of the billions of dollars that are pumped into them,
Bhaarat Bulletin’s Shikha Rai, Bimal Dev, and moneycontrol have contributed to the above report