After a surge of online education during the pandemic, Byju's was on a roll as the founder Byju Raveendran became another face of India's startup success story. The brand itself started expanding and even roped in superstar Shah Rukh Khan to promote it, while Whitehat Jr owned by Byju's was pulled up for false advertising. But all the euphoria gave way to shock and dismay when Byju's revealed a loss of more than Rs 4,500 crore for FY21.
Struggling to save costs and soften the impact of its losses, Byju's is now reportedly asking for easier terms to pay back its $1.2 billion loan. The company worth $22 billion is seen as India's highest valued startup, but its measures to tackle a crisis have hit 2,500 employees laid off by the firm. It has been reported that Byju's is asking for lower coupon rates and more time to repay the loan.
The edtech sector in India was on a path to aggressive expansion after success during the pandemic, but the funds and demand dried up after schools reopened. It was clear that online platforms lost out when the window to capitalise on the absence of traditional schooling had opened up. The result was excessive cash burn which hit revenues, and now creditors are concerned about capacity of major startups to clear dues.
Apart from Byju's, Unacademy and Vedantu have also been firing people to cut costs, while they continue expansion, as more than 7,000 workers have lost jobs in the sector in 2022.
