Raveendran blames investors, eyes new edtech avatar, says $533 million gone

An uncompromising Byju Raveendran said on Thursday that his investors were not blameless for the collapse of the edtech icon, claiming that they had aggressively backed it during its era of expansion and acquisitions but that “they had all fled” at the first sign. of problems.

“Investors were asking for that (a change of direction) without a plan,” Raveendran told reporters from his residence in Dubai. “Since the markets changed in December 2021, the only people who have been investing money in the company are us.” the edtech founder said, insisting that he remained the startup’s best hope. He was responding to a question about whether, in retrospect, he should have given up control of the company to save its value.

In February, Byju’s major investors including Sofina, Peak XV, Prosus and General Atlantic had moved the courts to remove Raveendran alleging mismanagement and oppression of minority rights. The company has since filed for bankruptcy.

The investment consortium did not immediately respond to MintRequests for comment Thursday night.

“The investors didn’t care about the students or the parents, they just wanted me to create a $100 billion company,” he said.

‘Flew’ false claims

Raveendran spoke to reporters from his residence in Dubai. He disagreed with the characterization that he had “fled” to Dubai and stated that he would return to India after his court trials to start another educational technology, which he would manage “at half the cost.”

Raveendran said he moved to Dubai to receive treatment from his father. Regarding the personal state of his life, he said that after having two children, he is now the father of a four-month-old daughter. Describing his mood as “positive,” he said he was still excited to return to teaching. His greatest skill was that he could change students’ minds in five minutes: “about how they think about learning.”

Every decision at Byju’s was taken with the consent of all investors, he said.

“The biggest encouragement I got for an acquisition was from Whitehat Jr. and conversely, the biggest resistance I got from the board was for the Aakash acquisition,” Raveendran said. To put it in context, Aakash is now considered to be the only bright star in Byju’s universe of 26 acquisitions. Whitehat Jr. was one of the first acquisitions to go sour.

Raveendran said if he had the benefit of experienced investors like Mohandas Pai at the beginning, he might not have made mistakes.

“We overestimated the potential growth…and being pioneers in the sector globally, we entered many markets together,” Raveendran said, arguing that Byju’s’ downfall was largely due to poor market timing and debt taken on by the company.

Byju’s is facing multiple litigations from lenders and investors. Lenders have sought repayment of the $1.2 billion loan it took out in November 2021. Investors have sought to preserve their rights in Think & Learn, while some, such as the Qatar Investment Authority, have sought a court ruling. . asking details of Raveendran’s personal assets.

Raveendran went on to state that although the value of the parent entity Think & Learn has now reduced to zero, Byju’s 26 subsidiaries, including Aakash Education Services and Great Learning, report cumulatively $5500 crores in ARR, even now. Mint was unable to independently verify this. At the height of the business in 2021, the company claimed to be manufacturing $10,000 crore in revenue and had over 85,000 employees including teachers on its platform.

The basis of business

Confessing for the first time since the crisis began at the company that was once valued at $22 billion, Raveendran said the core business has currently shrunk to zero. “There is currently no revenue in the core business,” he said.

According to him, the consolidated figures, taking into account the income of its various subsidiaries, add up to more than $5,000 crores. “These branches have seen growth in student enrollment and have performed well,” he added.

Raveendran claimed that he would return and said that if people closed Think & Learn, he would still find ways to teach.

Terming it as a relaunch and revival effort, Raveendran said the founders intend to remain in the edtech business and will likely bounce back in a different avatar.

On the stake in Aakash, Raveendran appeared to suggest that while Manipal group founder Ranjan Pai owned 40 per cent, the remaining 60 per cent is held by parent company Think and Learn Pvt. Limited. Limited.

To be clear, there are outstanding contractual milestones in the Aakash transaction.

Raveendran also said this would be finalized only after the latest tranche of share swaps by Blackstone and the Chaudhary family. While the Chaudhrys have an 18% stake left in Aakash, Blackstone still owns 12%.

the lost money

The $533 million that was at the center of the contention at edtech major has been offset by potential expenses the company had to incur over the next two years, he said. “This capital was used as collateral for these payment commitments that we made,” Raveendran said, explaining how the money ran out and therefore remained outside the limits of Term Loan B (TLB) lenders.

In a document filed in a US court last week, Raveendran confirmed that the $533 million could not be made available to the TLB’s lenders as it had been committed to cover future expenses, contrary to the previous position that the Money was kept safe abroad.

Resignation of auditors:

Brushing aside allegations of inability to access data and complete the audit on time that Deloitte Touche Tohmatsu India did in June 2023 while resigning as Byju’s statutory auditor, Raveendran said it was a collective and conscious decision of the company not to grant access to Deloitte as they were. unable to complete the audit within the given deadlines. “We didn’t want them to start the audit because the first time it took 12 more months. So, it was a joint decision of everyone,” Raveendran said.

Its second auditor, BDO, also resigned earlier this year, citing concerns over financial and governance issues.