New Delhi: The notorious edtech company BYJU’S of India is once more in the news, but not in the right form. The company was worth billions of dollars but lenders and investors are posing serious questions to it. Friends of the company feel that a lot of concerns have been raised rather than being addressed by the latest decisions made by the founder Byju Raveendran.
BYJU has expanded rapidly in the COVID-19 era when the online education is more sought after. The company was heavily involved in marketing and advertisements by celebrities as well as overseas acquisitions. Growth was impressive at that time. However, once schools reopened, there was a decline in student enrolments, and the amount of income was not equivalent to expenditure.
This is of concern to the lenders, as late payments of loans have been made. Other financial institutions and banks believe that the company is failing to communicate specific strategies on how to go about handling debt. It is reported that the internal decision was made on restructuring without even proper approval of the lenders, and this worsened the situation.
Another big issue is trust. Investors desire definite figures, but audits and financial reports have been postponed on numerous occasions. This has brought confusion and anger among the parties concerned. The employees have also been subjected to layoffs thus influencing the morale of the companies.
Proponents of the founder indicate that it will take time to rebuild such a big company. They feel that the education sector will once more expand and BYJU can resurrect. However, critics believe that the founder ought to have hit the brakes earlier than pursue such a high pace of growth.
This is a huge lesson to Indian start-up founders. Uncontrollable growth may cause great inconveniences. According to experts, founders need to be ambitious and financially disciplined.
At this point, the future of BYJU will be tied with the ability to regain the confidence of lenders and enhance transparency. Unless this occurs in the near future, the legal actions and the sales of assets can go up.
