The insolvency crisis facing Byju’s, the prominent Indian edtech company, is threatening to become a major disruption in the startup sector, plunging thousands of anxious employees into a struggle to reclaim unpaid wages and secure their futures.
Once celebrated as a major success story with a valuation peaking at $22 billion in 2022, Byju’s gained prominence by offering online courses during the COVID-19 pandemic. However, the company now faces a high-stakes battle with U.S. creditors demanding $1 billion in unpaid debts.
Interviews with employees and parents, alongside an analysis of WhatsApp conversations, reveal a mounting sense of urgency as individuals prepare to challenge the company, which is currently dealing with a suspended board and frozen assets.
Sukirti Mishra, 29, a former mathematics instructor for Byju’s unit WhiteHat Jr., shared her frustration on a conference call with approximately 60 colleagues. “Many of us, including myself, have stopped teaching because there’s no point in continuing to support a company that isn’t paying us,” Mishra said. She is grappling with unpaid medical bills and loan installments, exacerbated by the company’s failure to compensate her for months.
Byju’s is actively contesting the insolvency proceedings in court, hoping to regain control and avert a complete shutdown of operations. The Supreme Court of India is scheduled to hold a hearing on Thursday, following its decision last week to allow the insolvency process to proceed.
With around 27,000 employees at Byju’s, many are now considering protests or legal action after months without pay. According to a senior company executive, approximately 3,000 employees have already filed claims, substantiating their unpaid wages with bank statements.
In an internal memo, Byju’s founder Byju Raveendran promised, “When we regain control, we will ensure that all salaries are paid without delay.” However, the road to recovery remains uncertain, with potential asset sales or a search for a new buyer potentially taking months.
Byju’s, founded in 2011, has faced a series of setbacks recently, including leadership changes, delayed financial disclosures, and the resignation of its auditor. Investors, including Dutch technology firm Prosus, have accused Raveendran of mismanagement, allegations he has denied.
The current insolvency proceedings could mark the largest such event in India’s tech startup sector, which has historically attracted significant investments from firms like SoftBank and Tiger Global.
Approximately 280 Byju’s employees have approached a state grievance panel demanding action over unpaid salaries and unremitted taxes. They have expressed concerns that the company might shut down without settling their dues.
On social media platforms, affected employees and parents are exploring various strategies to recover their payments. Discussions in WhatsApp groups, with over 2,200 members, include organizing campaigns, protests, or legal action. Some parents are even considering tagging former Byju’s brand ambassadors like Argentine soccer star Lionel Messi on Instagram to draw attention.
Despite the challenges, Raveendran remains optimistic. “Our company is on the brink of reversing the negative business cycle that began two years ago and is showing signs of recovery,” he told staff in a memo on Tuesday.
