Caught in the middle of multiple legal cases, BYJU’S cofounder and CEO Byju Raveendran, has now reportedly denied all allegations of orchestrating a scheme to fraudulently transfer $533 Mn out of its $1.2 Bn term loan B (TLB).

As per a Bloomberg report, Raveendran said that the $533 Mn in question were used for “legitimate commercial purpose”.

He made the comments in a filing with a US bankruptcy court in Wilmington, Delaware, on the same day a judge was set to consider the TLB creditor’s plea alleging that the edtech startup fraudulently transferred the funds.

In the filing, the beleaguered cofounder said that the company planned to use most of the proceeds of the $1.2 Bn TLB (raised in November 2021) for international expansion. He, however, added that BYJU’S was hit by a “liquidity crunch” just as the company was “poised to see the returns on these strategic investments”.

Raveendran reportedly claimed that the edtech “needed to use the funds for its international expansion as quickly as possible” right after raising the TLB. He added that the company, quickly afterwards, entered into agreements with UK-based OCI Ltd., which offers procurement services for IT equipment and advertising.

As per the report, BYJU’S was subsequently unable to reimburse OCI for its services, forcing the latter to exercise its “right of set-off” against the edtech’s “Alpha Funds”. 

“Neither I nor any of the founders of T&L (BYJU’S parent Think & Learn) have personally received any portion of the Alpha Funds or any of the funds disbursed under the credit agreement,” Ravendran reportedly said.

For the uninitiated, the missing $533 Mn belongs to a bankrupt US-based shell company, BYJU’S Alpha Inc, which was taken over by the lenders after their loan defaulted. The company’s TLB creditors have long considered funds parked under BYJU’S Alpha as their best bet to claw back some of the capital. 

As a result, the edtech major’s lenders have dragged the company to various courts, seeking clarity over what happened to the alleged syphoned funds. In a filing with a US court, the lenders claimed that Raveendran told its advisors during a meeting that “the money is someplace the lenders will never find it”.

On Wednesday (October 9), BYJU’S cofounder claimed that he never used those words, adding that the entire case of fraud and syphoning of funds “is based on one statement that their representative wrote on a paper napkin and attributed to me (Raveendran)”. 

The CEO also claimed that during the meeting with the advisors, he wanted to explain to the lenders that the funds “would be utilised for their intended purpose”.

The developments came on the same day a trustee of one of BYJU’S affiliates accused the edtech startup of transferring $700,000 from its US affiliates in violation of the bankruptcy proceedings.

The trustee has filed a case to recover the funds that were transferred from entities under her oversight. Notably, in August this year, a US court directed Byju Raveendran’s brother Riju Ravindran to pay a fine of $10,000 per day until he helped locate the missing amount.

Owing to this, as many as four units in the US are facing bankruptcy proceedings, and, as per rules, such companies cannot transfer money without the bankruptcy judge’s approval.

At the heart of all this is the $1.2 Bn TLB extended by 37 financial institutions to BYJU’S through a credit agreement in November 2021. As funding winter reigned supreme, the company last year defaulted on the payments, forcing the creditors to move courts.

The post Missing $533 Mn Used For Legitimate Commercial Purposes: BYJU’S CEO appeared first on Inc42 Media.

In another trouble for embattled BYJU’S, a lawsuit in the federal court of Delaware in the US has reportedly accused the edtech giant of transferring $700,000 from its US affiliates in violation of the bankruptcy proceedings.

Citing the court papers, Bloomberg said that a trustee of one of the affiliates of the Byju Raveendran-led company has accused BYJU’S of syphoning off funds to Whitehat Education Technology. The money was to be repaid to BYJU’S US-based creditors, which are at war with the company over pending dues.

The trustee is seeking to recover nearly $700,000 that was transferred from entities under her oversight.

The US-based lenders have been fighting legal battles in the US as well as in India to recover dues from BYJU’S. The edtech giant has also been accused of hiding $533 Mn from the lenders. In August, a US court directed Riju Ravindran, brother of Byju Raveendran, to pay $10,000 a day till he helps locate the missing amount.

As a result, BYJU’s four units in the US are facing bankruptcy proceedings, the Bloomberg report said. As per the rules in the US, such companies cannot transfer money without an approval from the bankruptcy judge.

However, the lawsuit alleges that between September 26 and October 7, funds were transferred from the Stripe account of the bankrupt companies to a Wells Fargo bank account associated with Whitehat.

The trustee has alleged that individuals in India using “Byju-related email accounts” have attempted to access the US debtors’ account, the report added.

Inc42 has reached out to BYJU’S for comments on the development. The story will be updated on receiving a response.

At the core of the issue is the Term Loan B secured by BYJU’S through a credit agreement in November 2021. A total of 37 financial institutions participated in this loan, which stipulated that lenders could enforce their rights if the edtech startup defaulted on its loan repayments. Consequently, BYJU’S parent, Think & Learn Private Limited, pledged 100% of its equity in its US-based subsidiary, BYJU’S Alpha, as a collateral for the loan. 

Last year, after the struggling edtech startup defaulted on its payments, the consortium of lenders, represented by Glas Trust, became eligible to exercise their remedies as outlined in the credit agreement.

Quickly afterwards, Glas Trust filed a plea before the Delaware Court of Chancery and sought a declaration that their actions were valid. Thereafter, in November last year, the court delivered a ruling in favour of the consortium of lenders and agreed with Glas Trust’s interpretation of the credit agreement covenants and determined its actions, which included talking over BYJU’S Alpha, to be valid. 

Since then, the consortium of lenders has also been mounting a legal challenge in India against BYJU’S. 

The edtech startup, which was once the poster boy of the Indian startup ecosystem, has been plagued by an acute funding crunch, slowdown in operations, among others, over the last few years, which has resulted in it currently undergoing bankruptcy proceedings in India as well.

The post BYJU’S Accused Of Transfering Funds From US Units In Violation Of Bankruptcy Rules appeared first on Inc42 Media.

Edtech unicorn Physics Wallah has reportedly finalised the names of four investment banking firms for its public listing next year.

A report by Moneycontrol said that the edtech startup has shortlisted Axis Capital, Kotak Mahindra Capital, Goldman Sachs, and JP Morgan as the bankers for its proposed initial public offering (IPO).

The public issue will likely be a mix of fresh issuance of shares and offer for sale. “No quantum has been finalised yet and the deal size may vary later, but the proposed issue may look to raise in the range of $400 Mn to $500 Mn,” the report quoted a source as saying.

Inc42 has reached out to Physics Wallah for comments on the development. The story will be updated on receiving a response. 

The development comes days after it was reported that the edtech major sent out invitations to at least 10 investment banks to make pitches for the IPO in 2025. 

Amid the funding woes of the edtech sector, Physics Wallah raised $210 Mn last month in a round led by Hornbill Capital. The startup also managed to double its valuation to $2.8 Bn.

Founded by Alakh Pandey and Prateek Maheshwari in 2020, Physics Wallah is among the few profitable edtech startups in the country. It has expanded its offerings over the years, and currently offers courses for K-12 students, test preparation, UPSC coaching, among others.

Physics Wallah’s net profit declined over 90% to INR 8.9 Cr in FY23 from INR 98.2 Cr in the previous fiscal year due to a sharp rise in its expenses. Operating revenue soared 234% to INR 779.3 Cr in FY23 from INR 233 Cr in FY22.

The unicorn’s public listing bid comes amid the ongoing IPO boom in the Indian equities market. As a result, startups have also made a beeline to list on the bourses. While 10 new-age tech companies, including Go Digit, Ola Electric, FirstCry, Unicommerce, among others, have gone public this year, the likes of Swiggy, Ecom Express, MobiKwik, among others plan to go public over the next few months. 

The post Physics Wallah Selects 4 Investment Bankers For $500 Mn IPO appeared first on Inc42 Media.

Just a few days after elevating its executive Abhishek Pipara as the chief financial officer (CFO) of its offline centres business, edtech startup Unacademy has now promoted its director of people experience and culture, Arooshi Singh, as head of HR.

“Arooshi has worn many hats and led multiple functions across HR with dedication, passion, and excellence. Her journey with Unacademy has been inspiring, and her impact on the team has been immense,” said Gaurav Munjal, founder and CEO of Unacademy, in an internal note seen by Inc42. 

With an overall 13 years of experience, Singh has been associated with Unacademy for seven years. Previously, she spent more than 5 years teaching yoga and creating communities around it.

It is pertinent to note that the edtech giant has been undergoing a major restructuring for quite some time now. In July, Inc42 learnt that the company’s chief operating officer (COO) for offline centres, Jagnoor Singh, would be moving out. 

This came just a little over a month after cofounder and chief technology officer (CTO) Hemesh Singh announced to quit and move back to advisory role. 

Unacademy’s partner Sumit Jain replaced Singh as the cofounder– also getting a seat on the board. 

Earlier this year, the company appointed CRED’s head of finance Pratik Dalal as chief finance officer of its offline business – Unacademy Centres.

Notably, The Peak XV Partners-backed edtech startup reduced its loss to INR 1,678.1 Cr in the financial year 2022-23 (FY23) from INR 2,847.9 Cr in the previous fiscal. 

Unacademy was founded by Munjal, Hemesh Singh and Roman Saini in 2015. The edtech forayed into offline learning centres post pandemic in 2022. The company has its centres in about 40 cities in India, with a claimed network of more than 91,000 educators and over 99 Mn learners on its platform. 

The post Another Top Deck Rejig At Unacademy, Arooshi Singh Elevated As Head Of HR appeared first on Inc42 Media.

The funding gold rush of 2021-2022 gave a major boost to several sectors but the Indian edtech space turned out to be the prime beneficiary when the pandemic brought the world to its knees. 

The forced closure of schools and colleges paved the way for digital learning, and techies started to form a beeline to cater to the growing demand for online education. Not to mention, the growing demand for skill development among the workforce working in tech and tech-adjacent industries also fuelled the edtech growth story in India.

This propelled the Indian edtech space to become the third most-funded sector in 2021, securing $4.7 Bn in investments — only trailing behind ecommerce ($10.7 Bn) and fintech ($8 Bn). In fact, edtech raised $2.4 Bn in 2022 alone. Such was the scale that these two years accounted for 64% of the total $11 Bn the sector raised between 2014 and 2024.

But then, the reality struck when the world opened to business as usual, presenting challenges that the industry sleuths hadn’t anticipated. As physical classrooms reopened, the demand for online learning plateaued, exposing the cracks in edtech’s business models and their long-term sustainability. The results were immediate and stark. The edtech startup funding dropped 88% year-on-year to $283 Mn in 2023.

With this massive drop in funding many skeletons started to tumble out of the closets. For one, a lot of startups started to struggle with their incomplete playbooks amid expiring runways due to investors tightening their purse strings. This led to layoffs, shutdowns and whatnot.

The troubles compounded for the sector when BYJU’S, the country’s biggest edtech, started to stagger from being the poster child of India’s edtech boom to getting embroiled in back-to-back controversies. And we know how the fates of the once-edtech decacorn have unravelled since then, especially in 2024.

Well, to be true, the Indian edtech space is not doing too well, even as the first nine months of the ongoing year have done a little better on the funding front compared to the year-ago period.

As per Inc42’s quarterly funding report (Q3, 2024), startups in the space raised $278 Mn in the first nine months of 2024, up a mere 3% from the $269 Mn raised in the corresponding period in 2023. 

However, on a year-on-year basis, edtech funding in the third quarter of 2024 was up 357% to $224 Mn from a mere $49 Mn in Q3 2023. 

However, what needs to be acknowledged is that PhysicsWallah alone netted $210 Mn of the total edtech funding raised in the three quarters of 2024.

Sans PhysicsWallah, the Indian edtech funding in the first nine months of the year seems to be dangling at around $68 Mn, enduring a decline of nearly 75% YoY. Similarly, the edtech funding during Q3 of 2024 stood at just $14 Mn, without counting PhysicsWallah.

Notably, as per Inc42’s latest Indian Tech Startup Funding Report Q3 2024, PhysicsWallah was the second biggest mega deal after Zepto’s $340 Mn in this year’s September quarter. 

Despite this, the Indian edtech sector couldn’t make it to the list of the top 10 most funded startup sectors during the recently-concluded quarter.   

Is The Indian Edtech Sector Headed For Revival?

Despite the dilapidated state of affairs, experts hope that the sector may see a funding revival, especially when we have startups like PhysicsWallah (PW) to support the Indian edtech growth story. Notably, the edtech unicorn raised $210 Mn (approximately INR 1,756.7 Cr) in its Series B funding led by Hornbill Capital at a post-money valuation of $2.8 Bn.

“The edtech industry has learned valuable lessons from its rapid rise and fall after the pandemic. While the initial boom showed potential, many companies struggled to scale effectively, highlighting the need for a hybrid approach. PhysicsWallah is a standout example, managing to break through the clutter. The future of education is not just in online models, but in combining digital and offline experiences,” Anup Jain, founding partner of India Early Stage Fund said.

He also noted that the K-12 segment has become crowded, with numerous edtech players competing for the same space. This is because K-12 is the highest-funded subsector in edtech. As per Inc42’s annual “The State Of Indian Startup Ecosystem Report“, the K-12 segment received $5.8 Bn between 2014 and 2024, accounting for 54.5% of total edtech funding. 

Meanwhile, Jain sees new opportunities for the segment with the roll out of the National Education Policy (NEP).   

Further, there is a growing shift towards design thinking and skill-based learning, which offers startups a chance to thrive by focussing on employability and career development. Per industry experts, the future of education will focus on preparing students for real-world challenges, particularly in the age of AI and automation.

“Funding revival will likely start from seed and pre-seed rounds. Beyond one or two exceptions, there hasn’t been much significant interest in late-stage investments. For edtech companies, the challenge is that business models and unit economics can shift overnight. That’s why we anticipate more seed and Series A activity in the near future, as products driven by AI and machine learning show strong traction,” Rohit Krishna, partner at WEH Ventures, said.

The Future Of Edtech In India

Anticipating revival in seed and pre-seed edtech rounds, WEH Ventures’ Krishna sees new technologies, like generative AI, as key drivers for the next big edtech boom. 

He also envisions such technologies driving significant improvements in product quality, all while reducing costs. Notably, the industry is witnessing a wave of new companies capitalising on emerging technologies, particularly in the early stages. 

Unlike the edtech gold rush of 2021-2022, startups founded more recently have started to look more lucrative to investors. This is because these startups, helped by emerging technologies, are endeavouring to create more interactive and engaging content.

Additionally, generative AI is being employed to automate administrative tasks within edtech platforms, streamlining operations so educators can focus more on teaching.

Furthermore, as conversational AI and chatbots gain traction in education, many companies will be seen using them to provide personalised and immersive learning experiences. Additionally, AI-assisted grading has improved the speed of assessments, allowing users to receive graded assignments promptly and benefit from instant feedback.

Hence, investors predict a revival in early-stage funding for edtech over the next year, although they will remain cautious before committing to large investments.

[Edited By Shishir Parasher]

The post Can Edtech In India Find Its Footing Again? appeared first on Inc42 Media.

Gaurav Munjal-led edtech startup Unacademy has elevated its executive Abhishek Pipara as the chief financial officer (CFO) of its offline centres business.

In his new role, Pipara will focus on driving efficiency, unit economics, growth and profitability at a Centre level, the company said in a statement.

With an overall 16 years of experience in fundraising, mergers and acquisitions, setting up systems and processes, he has been working with Unacademy for over six years.

Munjal said, “Pipara has been an instrumental part of our journey, driving financial efficiency and strategic growth. With his leadership, I’m confident we will continue to scale and excel as we move forward.” 

Previously, Pipara worked in various roles in startups and consulting firms such as Little App, Zovi and Deloitte. He was the head of finance at online to offline (O2O) service company Little App from May 2015 to February 2018. Earlier, he served as the finance head at retail apparel and fashion brand Zovi from 2013 to 2018.

Before that, Pipara was the deputy manager at Deloitte from 2008 to 2010. 

Founded by Munjal, Hemesh Singh and Roman Saini in 2015, Unacademy runs both offline and online learning centres. The Bengaluru-based edtech startup claims to have centres in nearly 40 cities across the country with a network of over 91k registered educators and over 99 Mn learners.

Unacademy has been undergoing a major restructuring for quite some time now. In July, Inc42 learnt that the company’s chief operating officer (COO) for offline centres, Jagnoor Singh, would be moving out. 

It was just a little over a month after Unacademy cofounder and chief technology officer Singh announced his decision to take a back seat after being with the startup for more than eight years.  

Unacademy’s partner Sumit Jain replaced Singh as the cofounder and also has a seat on the startup’s board. 

Earlier this year, Unacademy announced its entry into the language learning space with the launch of its Unacademy Language Learning App. 

The Peak XV Partners-backed edtech startup reduced its loss to INR 1,678.1 Cr in the financial year 2022-23 (FY23) from INR 2,847.9 Cr in the previous fiscal. 

The post Unacademy Elevates Abhishek Pipara As CFO Of Its Offline Centres Business appeared first on Inc42 Media.

Bengaluru-based edtech startup Vedantu has secured INR 19.25 Cr ($2.4 Mn) in a mix of debt and equity financing from Stride Ventures Debt Fund II.

While 1,750 unlisted, secured, redeemable non-convertible debentures (NCD) of face value of INR 1 lakh each was proposed to raise INR 17.5 Cr, the remaining INR 1.75 Cr was secured against issuing 4,968 series E2 partly paid up compulsory convertible preference shares(CCPS) at an issue price of INR 3,522.80 per share, as per the company’s filing.

Vedantu’s loss declined 46% to INR 372.6 Cr in the financial year 2022-23 (FY23) from INR 696.2 Cr in the previous fiscal year. 

However, the startup also saw a decline in its revenue from operations during the year under review. Its operating revenue stood at INR 152.5 Cr in FY23, down 8% from INR 166 Cr in the previous year.

Founded in 2014 by Vamsi Krishna, Anand Prakash, and Pulkit Jain, Vedantu offers courses through online and offline medium. 

The startup offers tuition to school students and also courses for NEET and JEE entrance exams. It has also started offering curated courses for kids 4 to 12 years of age. 

It entered the coveted unicorn club in 2021 after raising $100 Mn in its Series E funding round from Temasek-backed private equity firm ABC World Asia, along with participation from existing investors Coatue Management, Tiger Global, GGV Capital and WestBridge. 

It is pertinent to note that the fundraising comes against the backdrop of the Indian edtech sector undergoing a massive funding crunch. 

Unlike the tendency shown by VCs and PEs before the pandemic wherein they infused billions of dollars during the height of the pandemic, the segment has witnessed a waning interest of the investor as the schools and colleges opened post-lockdown. 

Besides this, a slew of issues within the startups in the sector made the matter worse. This issue included heavy cash burn, mounting losses, and weak governance guardrails, among other issues.

According to Inc42’s Indian Tech Startup Funding Report 2023, the Indian edtech startups raised $283 Mn in 2023 against $2.4 Bn in 2022, accounting for a massive 88% year-on-year (YoY) decline. The number of deals also plummeted 45.91% YoY to 139 in 2023 from 257 in 2022.

The post Vedantu Bags INR 19.25 Cr In A Mix Of Debt & Equity appeared first on Inc42 Media.

The Supreme Court on Thursday (September 26) reserved its verdict on a petition filed by the US-based lenders of BYJU’S that challenged the National Company Law Appellate Tribunal’s (NCLAT) decision to stop insolvency proceedings against the edtech firm.

An SC bench, comprising Chief Justice DY Chandrachud and Justices JB Pardiwala and Manoj Misra, directed the edtech startup’s insolvency resolution professional (IRP) to maintain the status quo until the court delivers its judgement.

During the hearing, the SC issued further directions to the IRP not to proceed with the committee of creditor’s meeting to deal with the BYJU’s case.

As per a separate Moneycontrol report, the counsel for the creditors of BYJU’S discussed possible conditions for a settlement, including ensuring that any payments made should not come from BYJU’S assets. 

Referring to Regulation 30A of the Insolvency and Bankruptcy Code (IBC), the court also reportedly flagged concerns about whether current laws allow for a settlement to bypass the established procedures.

This comes a day after the SC bench on Wednesday (September 25) questioned the NCLAT decision to strike off the bankruptcy proceedings against the embattled edtech startup. In the same hearing, the bench also reportedly observed that it was mulling sending the matter back to the NCLAT. 

The SC hearing comes days after the Delaware Supreme Court (SC) ruled that BYJU’S had defaulted on its TLB. With the judgement, the US-based lenders can now legally demand full repayment of the loan as well as take full control of BYJU’s Alpha.

At the heart of all this are the ongoing insolvency proceedings against the company, which were initiated earlier this year. Following this, the consortium of the US-based lenders has claimed dues to the tune of INR 11,432 Cr ($1.36 Bn).

Meanwhile, the ongoing drama is expected to add more fuel to the fires at BYJU’S. The edtech major has been in the news for all the wrong reasons including mass layoffs, pending salaries of employees, mounting losses, cash crunch, and the list goes on.

The post BYJU’S Glas Trust Case: SC Asks IRP To Maintain Status Quo Until Judgement appeared first on Inc42 Media.

In another twist in the ongoing legal saga of BYJU’S, the Supreme Court on Wednesday (September 25) questioned the National Company Law Appellate Tribunal (NCLAT) decision to strike off the bankruptcy proceedings against the embattled edtech startup.

During today’s hearing on the case between Glas Trust and the edtech startup’s founder Byju Raveendran and others, chief justice of India (CJI) DY Chandrachud said that the bench is considering sending the matter back to the NCLAT, Bar and Bench reported.

“See the reasoning in NCLAT order… which is just a para. This does not show any application of mind at all… Let the Tribunal again apply its mind and see it afresh,” the CJI was quoted as saying. 

Further questioning the NCLAT’s decision, Chandrachud asked why the amount due to the Board of Cricket Control for India (BCCI), which amounted to a little over INR 158 Cr, was given more weightage over the INR 15,000 Cr due to the consortium of BYJU’S Term Loan B (TLB) lenders. 

“BCCI has a small amount due of INR 158 Cr…What about others? They all again have to go through the entire circle,” the publication quoted the CJI as saying. 

The development came a day after the Delaware Supreme Court (SC) ruled that BYJU’S had defaulted on its TLB.  

With the judgement, the US-based lenders can now legally demand full repayment of the loan as well as take control of BYJU’s US entity BYJU’S Alpha. 

On home soil, BYJU’S directors lost control of the startup when the SC set aside NCLAT’s decision to quash the insolvency proceedings against it. Following the initiation of the insolvency proceedings, the consortium of the US-based lenders have claimed dues to the tune of INR 11,432 Cr ($1.36 Bn). 

While Aditya Birla Finance has staked claim for INR 139 Cr, Aakash Educational Services Ltd (AESL) has filed a claim for INR 1,404 Cr ($167 Mn). 

The post SC Questions NCLAT’s Decision To Approve BYJU’S-BCCI Settlement appeared first on Inc42 Media.

In a major blow to BYJU’S, the Delaware Supreme Court (SC) has ruled in favour of US-based creditors of the troubled edtech startup. 

With this, the Delaware’s highest court of appeal upheld the Court of Chancery’s earlier ruling that held that BYJU’S defaulted on a $1.2 Bn term loan B (TLB). 

“We find it difficult to see how judicial economy and finality can square with requiring the parties to retry the case, merely because appellants (BYJU’S) failed to address an issue which they now claim is vital to this case… After examining the record, we cannot conclude that this threshold has been met,” read the judgement by Justice Karen Valihura.

The Delaware SC’s order allows US-based lenders of BYJU’S to demand full repayment of the loan, take control of its US-based entity BYJU’S Alpha and appoint Timothy Pohl, who was appointed by Alpha as its CEO, as its sole director.

At the heart of the matter is the TLB availed by BYJU’S via a credit agreement in November 2021. As many as 37 financial institutions bought the loan under the agreement that they lenders would be free to enforce their rights if the edtech startup defaulted on loan payments. 

In turn, BYJU’S parent Think & Learn Private Limited’s US-based subsidiary BYJU’S Alpha pledged 100% of its equity as collateral for the term loans. Last year, the troubled edtech startup defaulted on payments, making the consortium of lenders, under Glas Trust, eligible for enforcing its remedies in accordance with the credit agreement. 

Quickly afterwards, Glas Trust filed a plea before the Delaware Court of Chancery and sought a declaration that their actions were valid. Thereafter in November last year, the Court delivered a ruling in favour of the consortium of lenders and agreed with Glas Trust’s interpretation of the credit agreement covenants and determined its actions, which included talking over BYJU’S Alpha, to be valid. 

Thereafter, the embattled edtech major filed an appeal before the Delaware SC, arguing that the Court of Chancery’s ruling should have been dismissed on account of a pending case filed by BYJU’S against Glas Trust before a court in New York.

On Monday, the SC dismissed the appeal and observed that the edtech startup waived its forum selection clause by not arguing it before the Court of Chancery. 

Simply put, a forum selection clause is a provision that allows parties to agree on a specific court to resolve any disputes related to a contract.

“… Even if we assume Aappellees were not unfairly surprised by the forum selection issue, appellants’ failure to join the issue prevented the issue from being determined by the trial court. Appellees and the trial court took the time, effort, and expense to litigate this case through extensive briefing and a trial. We find it difficult to see how judicial economy and finality can square with requiring the parties to retry the case, merely because appellants failed to address an issue which they now claim is vital to this case,” read the September 23 ruling by Justice Karen Valihura.

Responding to the court order, BYJU’S said it has no bearing on the ongoing legal proceedings in India, where Glas Trust has filed a plea with the Supreme Court challenging its removal from the committee of creditors. It has also sought ouster of BYJU’S interim resolution professional Pankaj Srivastava.

BYJU’S said that the Delaware Supreme Court order only upheld the lower court’s ruling on the validity of Pohl as the director of the edtech’s US-based entity BYJU’S Alpha Inc. 

“BYJU’S contractual right to disqualify certain aggressive lenders who deal in distressed debt remains intact. The disqualification of lenders holding over 60% of the TLB remains in effect, with no court decision on the contrary,” it said.

The latest blow comes at a time when the edtech major is trying to douse fires on multiple fronts. The company is facing a worsening cash crunch, insolvency proceedings, multiple legal cases and mass layoffs. 

Making matters worse is the mounting losses and rising expenses of the edtech major. BYJU’S reported a net loss of INR 8,245.2 Cr in the fiscal year 2021-22 (FY22), up 81% from INR 4,564.3 Cr in FY21.

Meanwhile, operating revenues jumped 120% year-on-year (YoY) to INR 5,014.6 Cr during the year under review.

Update: The story has been edited to include BYJU’S comments on the US court ruling.

The post Delaware Supreme Court Rules BYJU’S Defaulted On $1.2 Bn Loan appeared first on Inc42 Media.

At a time when its investor BYJU’S is going through an insolvency process, Aakash Educational Services is chalking out a revamping strategy ‘Aakash 2.0’ aimed at scaling up its operations, bringing efficiency and building hybrid learning centres.

This comes days after Aakash downsized its workforce by laying off around 80-100 employees over the last couple of months.

On its association with Think & Learn’s BYJU’S, Aakash Educational Services’ Deepak Mehrotra clarified that Aakash is now a separate entity and that the recent developments surrounding the edtech major should not impact Aakash’s 2.0 operations. 

“We are now an independent company, having moved away from being a subsidiary of BYJU’S due to recent changes in ownership and our capital structure,” Mehrotra told Business Standard. 

Notably, BYJU’s parent Think & Learn acquired AESL in 2021 for around $1 Bn in a cash-and-stock deal. However, the planned merger between the two has been withdrawn and AESL continues to operate independently under the BYJU’S umbrella. 

Following the deal in 2021, the two parties have been at loggerheads in the past over the share swap. The Chaudhry family, which founded Aakash, refused to swap their shares.

Mehrotra also conveyed that a new investor, Manipal Group, will join the board. 

Notably, in July, the Competition Commission of India gave a green signal to Manipal Health Systems and Ranjan Pai’s MEMG Family Office LLP for the proposed buyout of a stake in BYJU ’s-owned Aakash Educational Services.

“This transition means we are in the process of rebuilding our identity as a completely independent entity. In this context, the changes we are implementing are part of what I call Aakash 2.0.”

MEMG’s chairperson Ranjan Pai emerged as the largest shareholder of Aakash with about 40% stake in the company. 

Mehrotra outlined that AESL has been battling challenges this year over controversies surrounding the NEET (National Eligibility cum Entrance Test) exam results and subsequent intervention by the Supreme Court.

However, on the performance front, Mehrotra said the firm saw a strong performance, with approximately 35-37% of the top 100 ranks achieved by Aakash students. 

On the financial front, Aakash’s operating revenue likely stood at INR 2,325.1 Cr for FY23, a 63% increase from the INR 1,421.2 Cr in the previous fiscal year. 

Meanwhile, BYJU’S is caught in a whirlwind of troubles. The company has been in the news for all the wrong reasons over the last year or so due to a severe cash crunch, multiple layoffs, legal cases, among others. 

It is currently undergoing insolvency proceedings and some of its lenders have moved to different courts against the resolution professional appointed for its insolvency process.

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Fresh off its recent $210 Mn fundraise, edtech unicorn Physics Wallah has reportedly set its eyes on listing on the stock exchanges next year. 

The edtech major has lined up pitches from investment bankers next week for a proposed initial public offering (IPO) in 2025, Moneycontrol reported citing sources. 

“RFPs (request for proposals) have been sent to at least 10 investment banks, inviting them to make IPO pitches which are scheduled for the coming week. These are early days and no final call has been taken but the intent to list is there,” a source was quoted as saying. 

Another source told the publication that the startup plans to “aggressively pursue” its listing plans and is eyeing a valuation north of $2.8 Bn, the number at which it raised its latest funding earlier this week. 

Inc42 has reached out to Physics Wallah seeking comments on the development. The story will be updated on receiving a response.

Physics Wallah will become India’s first edtech startup to list on stock exchanges if its IPO plans go through. 

On Friday (September 20), the edtech startup said it raised $210 Mn in its Series B funding round led by Hornbill Capital. The round also saw participation from Lightspeed Venture Partners and existing investors GSV Venture and WestBridge Capital.

Founded in 2020 by Alakh Pandey and Prateek Maheshwari, Physics Wallah operates tech-enabled offline and hybrid centres for K-12 students across 105 cities in the country. Its offerings also include test preparation verticals across various exams, a skilling arm and study abroad verticals. 

It entered the unicorn club in 2022 by raising $100 Mn in its maiden funding round from WestBridge and GSV at a valuation of $1.1 Bn. It competes with the likes of BYJU’S, Unacademy, Vedantu, among others. 

Physics Wallah’s net profit declined over 90% year-on-year (YoY) to INR 8.9 Cr in FY23, while operating revenue jumped 234% YoY to INR 779.3 Cr. Its cofounder and CEO Maheshwari told Inc42 that the startup clocked a revenue of INR 1,975 Cr in FY24.

The development comes at a time when the country’s edtech ecosystem is in disarray. The pandemic-fuelled growth of edtech startups fizzled out as schools reopened, forcing many to experiment with offline models. 

However, the situation exacerbated when funding winter dried up capital for edtechs even as their losses continued to grow manifold. Many of their high-profile acquisitions also failed to take off, resulting in startups like BYJU’S and Unacademy undertaking mass layoffs in the last two years. 

Physics Wallah’s IPO plans also come at a time when a slew of Indian startups are looking to list on the bourses. As many as ten new-age tech companies have listed on the Indian stock exchanges so far this year, while many others are also looking to make their market debut owing to positive market sentiment and growing investor appetite for startup IPOs. 

The post IPO On The Cards? Physics Wallah Seeks Investment Bankers For Market Debut In 2025 appeared first on Inc42 Media.

Amid the ongoing insolvency proceedings, BYJU’S founder and CEO Byju Raveendran told the teachers working with the edtech startup that he has managed to borrow some funds to make a “small payment by this weekend” to them. 

In an email addressed to the teachers, Raveendran said that BYJU’S employees will get paid once the founders regain control of the company’s finances. He acknowledged that the company hasn’t paid the teachers for the past three months but promised to pay more than their “fair share” once he regains control of the company. 

Inc42 has accessed the email sent by the founder.

Raveendran also asserted confidence in winning the case that the company is currently facing in the Supreme Court, filed by its US-based lenders Glas Trust. 

“Right now, there are many legal battles underway. US-based lenders have filed a flimsy case, staking a claim on our India assets. But they have no entitlement to these assets, as per the agreement we signed with them. The so-called trust that represents them in India has no legal standing. It does not represent the majority of these lenders,” he said in the mail. 

This is the second email written to Raveendran to employees in the past month. Since his last email, the company’s battle with Glas Trust has intensified in the Supreme Court. 

Glas Trust moved the Supreme Court against a ruling by National Company Law Appellate Tribunal (NCLAT) that had stayed the insolvency proceedings against the embattled edtech giant.

Following this, the Supreme Court revived the insolvency proceedings. The consortium of the edtech’s term loan B (TLB) lenders has claimed dues to the tune of INR 11,432 Cr ($1.36 Bn). Besides, BYJU’S wholly owned subsidiary and coaching chain Aakash Educational Services Ltd (AESL) has filed a claim of INR 1,404 Cr ($167 Mn). 

“This process has been challenged by us in the court of law because we believe in this company, we believe in our mission, and most importantly, we believe in you. We know that BYJU’S is not just a business model,” Raveendran said in the mail. 

In his previous mail, Raveendran said that the lenders which Glas Trust represents are not the company’s original lenders, who had signed an agreement to get repaid in November 2026. He said they are “aggressive foreign distress funds” who are using “unlawful” ways to force the company to pay back the $1.2 Bn within 16 months of distribution.

Meanwhile, Glas Trust was also disqualified from the Committee of Creditors (CoC) by the insolvency resolution professional, Pankaj Srivastava, after its first meeting on September 3.

After the ouster, the lenders labelled Srivastava’s actions as unprecedented and entirely illegitimate. The lenders have also challenged their removal from BYJU’S CoC at the SC. Besides, Glas Trust is also seeking the removal of Srivastava.

The post Byju Raveendran Borrows Funds To Make Small Payment To BYJU’S Teachers appeared first on Inc42 Media.

Edtech unicorn Physics Wallah (PW) has raised $210 Mn (about INR 1,756.7 Cr) in its Series B funding round, led by Hornbill Capital, at a post-money valuation of $2.8 Bn.

The round also saw participation from Lightspeed Venture Partners and its existing investors, GSV and WestBridge.

PW cofounder Prateek Maheshwari told Inc42 that the startup will largely use the funds for its strategic plans, which include geographical expansion and acquisitions.

“Currently, we are sitting on INR 1,200 Cr plus treasury…. For our internal growth initiatives – be it Vidyapeeth expansion, new category launches, new vertical business, and innovation which we are doing – we are sufficiently capitalised. But now we are a total group size of 15,000 employees (and) we thought of raising one round so that the treasury gives us more comfort. It’s a comfort capital which we have raised,” said Maheshwari.

Overall, the edtech player, which seems to be following the path of its rivals BYJU’S and Unacademy in terms of aggressive fundraise, product category expansion, and acquisition, aims to use the fresh funds to pursue inorganic expansion, enter the K-12 formal education segment, enhance its content and publication offerings, and explore mergers with community-driven education platforms across categories going forward. 

Maheshwari said that the startup hasn’t shortlisted any asset for acquisition yet but has a thesis in place, which includes companies in content-heavy categories, such as the publication industry.

Besides, it is also evaluating companies that can help PW with geographical expansion, particularly in the southern part of India.

“In general, we do not have a huge strength in the southern part. Xylem has done a phenomenal job in Kerala and they are planning to expand it to Tamil Nadu also. But Andhra Pradesh, Telangana, Bengaluru are the markets where we are not as strong (in terms of) online as well as offline presence…” Maheshwari said.

It is worth noting that in June last year, PW acquired a 50% stake in Kerala-based Xylem in an INR 500 Cr (around $61.04 Mn) deal.

Founded in 2020 by Alakh Pandey and Maheshwari, PW entered the unicorn club in 2022 by raising $100 Mn in its maiden funding round from Westbridge and GSV Ventures at a valuation of $1.1 Bn. Since then, it has expanded its offerings by entering the offline space and acquiring multiple companies.

In 2023 alone, PW made three other acquisitions – iNeuron, which offers skill development courses in AI and ML; test prep platform Utkarsh Classes: and UAE-based K-12 online learning platform Knowledge Planet.

PW currently operates tech-enabled offline and hybrid centres across 105 cities in the country. Its offerings span various educational segments, including two Gurukulam Schools, test preparation in 43 categories, a skilling vertical, and higher education and study abroad verticals. It also claims to offer free education to over 4.6 Cr students through its 112 YouTube channels in five vernacular languages. 

Speaking on the investment, Manoj Thakur, founder of Hornbill Capital, said, “Physics Wallah is a rare combination of vision, execution, and impact with a thriving 3C model – content, community, and commerce. We are excited to see PW’s use of AI not only to help improve students’ outcomes but also their emotional well-being.”

It is pertinent to mention that PW’s indigenously built Alakh AI was launched in December last year. Its AI educational suite’s offerings include AI Guru, Sahayak, and NCERT Pitara among others. Already 40 Lakh students are using its AI Guru product, as per the company.

PW is also entering into a strategic partnership with Microsoft, Maheshwari said but didn’t provide any further details.

PW will continue to invest more money and time on AI, he said.

A Quick View Of PW Financials

It is pertinent to note that PW was net profitable in FY23 even as its top edtech competitors, like Unacademy and Vedantu have been struggling on that front. However, its net profit narrowed over 90% year-on-year (YoY) in FY23 to INR 8.9 Cr. Meanwhile, PW’s operating revenue increased 234% YoY to INR 779.3 Cr that year.

Maheshwari told Inc42 that the startup clocked a revenue of INR 1,975 Cr in FY24, adding it expects the revenue to jump over 50% in the current fiscal year (FY25).

However, PW slipped into loss at a group level in FY24 and aims to turn PAT positive in FY25. Maheshwari said that the company was profitable in Q1 of the current fiscal and will post the highest EBITDA numbers in the history of the company in FY25.

“As a strategy, we are focusing on growth and student experience, we are not much worried about profitability. We believe in sustainable growth, (and) when the competition is weak, we should go out and capture the maximum market to maintain the student experience… Breakeven is a good thing for us, (though) we will generate good EBITDA this year,” Maheshwari said.

Meanwhile, differentiating PW from BYJU’S, Maheshwari said that PW’s cash allocations have been around 30-40X lower than the embattled company and all the acquisitions have helped the company grow.

“There has to be some fundamental synergies with the businesses when you choose inorganic growth, and a good amount of effort goes into integration. If you look at all the large businesses within the group, they have been built in-house. Be it Vidyapeeth, which has turned profitable this year, be it Pathshala… we are number one in all these categories not only in terms of students but also revenue,” Maheshwari concluded.

The post Physics Wallah Raises $210 Mn With An Eye On Acquisitions, Valuation Doubles To $2.8 Bn appeared first on Inc42 Media.

In further troubles for Pankaj Srivastava, the insolvency resolution professional (IRP) of BYJU’S, EY (Ernst and Young) Restructuring has reportedly resigned from its role of advisor to the IRP. 

The Times Of India reported the development citing the minutes of the first meeting of the Committee of Creditors (CoC). 

A mail sent to EY and representatives of the IRP seeking information on the development didn’t elicit any response till the time of publishing this story. BYJU’S declined to comment on the matter. 

This comes at a time when Srivastava has been dragged to courts by multiple creditors of BYJU’S. 

Glas Trust, a consortium of BYJU’S US-based lenders, moved the Supreme Court earlier this week against Srivastava’s decision to remove it from the CoC. The consortium  accused him of making an “irrational” decision and are seeking his removal from the proceedings. 

Srivastava ousted Glas Trust from the CoC during its first meeting. The decision was made after concluding that Glas Trust did not represent the minimum 51% of lenders in the consortium, which provided the $1.2 Bn term loan B (TLB) to BYJU’S. 

Earlier in a statement, Glas Trust labelled Srivastava’s move as unprecedented and entirely illegitimate and said it marked the first instance in the history of the Insolvency and Bankruptcy Code of India where financial creditors were “unlawfully stripped of this magnitude amounting to more than $1.35 Bn without any legitimate reason”.

Besides, Aditya Birla Group also moved the National Company Law Tribunal (NCLT) against Srivastava, alleging that he committed fraud by wrongfully labelling it as an ‘operational creditor’ instead of a ‘financial creditor’.

It is also pertinent to note that BYJU’S auditor BDO (MSKA & Associates) resigned earlier this month citing concerns over “financial” and “governance” issues.

In its resignation letter, BDO highlighted several troubling issues, including delays in financial reporting, lack of support from the management and concerns over recovering outstanding dues from a Dubai-based entity.

BYJU’S, once a posterboy of the Indian startup ecosystem, has been in the news for all the wrong reasons over the last year or so. From a severe cash crunch, delay in filing financial statements to investors quitting its board and mass layoffs, the company has been plagued by a host of problems. This has culminated in the company undergoing insolvency proceedings.

The post BYJU’S Insolvency: EY Quits As Advisor To IRP Pankaj Srivastava appeared first on Inc42 Media.

Offline coaching centre Aakash Educational Services Limited (AESL), in which embattled BYJU’S owns some stake, reportedly fired about 80-100 employees over the last couple of months.

Citing sources, Entrackr reported that the layoffs affected both senior and middle-level executives, with some long-time employees also being let go.

Without confirming the number of employees impacted by the layoffs, a spokesperson of AESL cited a shift in the business model as the reason behind it.

“As a high-performance organisation, our performance reviews, talent development interventions, and consequence management follow a biannual cycle. We are introducing new business models as part of the Aakash 2.0 strategy, which includes creating new roles, consolidating existing ones, and aggressively hiring new talent. Unlike other players in the category, we expect to be net hirers by the end of this year,” the spokesperson told the publication. 

It is pertinent to note that AESL was acquired by BYJU’S, which is now undergoing insolvency proceedings, in a cash-and-stock deal for $1 Bn in 2021. However, the two parties have been at loggerheads in the past over the share swap. The Chaudhry family, which founded Aakash, refused to swap their shares.

Meanwhile, Manipal Health Systems and Ranjan Pai’s (MEMG) Family Office LLP has been increasing its stake in Aakash. In July 2024, the Competition Commission of India (CCI) approved the proposed buyout of a substantial stake in Aakash by MEMG Family Office. With this, MEMG’s chairperson Ranjan Pai emerged as the largest shareholder of Aakash with about 40% stake in the company. 

In FY23, Aakash’s operating revenue likely stood at INR 2,325.1 Cr, a 63% increase from the INR 1,421.2 Cr in the previous fiscal year. 

Meanwhile, BYJU’S is caught in a whirlwind of troubles. The company has been in the news for all the wrong reasons over the last year or so due to a severe cash crunch, multiple layoffs, legal cases, among others. It is currently undergoing insolvency proceedings and some of its lenders have moved to different courts against the resolution professional appointed for its insolvency process.

The post Aakash Fires About 80 Employees Citing Shift To A New Business Model appeared first on Inc42 Media.

The consortium of BYJU’S US-based lenders, Glas Trust LLC, has moved the Supreme Court against the troubled edtech giant’s insolvency resolution professional, Pankaj Srivastava.

Glas Trust has challenged its removal from BYJU’S committee of creditors (CoC). Besides, it is also seeking the removal of Srivastava.

As per Livemint, Glas Trust’s counsel Kapil Sibal told a bench led by CJI DY Chandrachud that its disqualification from the CoC was unwarranted. He alleged that Srivastava verified and admitted Glas Trust’s claims but later dropped them from the CoC. 

“We are financial creditors and we have over 19% vote share and the resolution professional disqualified us,” Bar and Bench quotes Sibal as saying.

The next hearing in the matter is scheduled on Wednesday (September 18). 

It is pertinent to note that Glas Trust was removed from the CoC shortly after its first meeting on September 3. After the ouster, the lenders labelled Srivastava’s actions as unprecedented and entirely illegitimate.

“No interim resolution professional in the history of the Insolvency and Bankruptcy Code of India has ever attempted to unlawfully strip financial creditors of claims of this magnitude amounting to more than $1.35 Bn without any legitimate reason and in doing so securing his appointment as the permanent resolution professional,” it said in a statement.

Glas Trust also moved the National Company Law Appellate Tribunal (NCLAT) seeking a stay on further meetings of the CoC. However, the Appellate Tribunal refused to grant any immediate relief.

This is the second legal case against Srivastava since he has taken charge of BYJU’S bankruptcy proceedings. Last week, Aditya Birla Finance also moved the National Company Law Tribunal (NCLT) against Srivastava, alleging that he committed fraud by wrongfully labelling the former as an ‘operational creditor’ instead of a ‘financial creditor’. 

Aditya Birla Finance has filed claims worth INR 47.2 Cr, of which Srivastava has admitted INR 30 Cr of claims. 

Meanwhile, Glas Trust has filed a claim for dues worth INR 11,432 Cr ($1.36 Bn). However, BYJU’S founder Byju Raveendran claims that the IRP had verified debt claims worth only INR 20 Cr.

It is pertinent to note that the US-based Term Loan B lenders have also accused BYJU’S of syphoning off $533 Mn and are fighting a separate case in a US Bankruptcy Court. Earlier in August, the court ordered Raveendran’s brother Riju Ravindran to pay $10,000 a day until he helps locate $533 Mn that his company is accused of hiding from US lenders.

The post Now, Glas Trust Drags BYJU’S Resolution Professional To Supreme Court appeared first on Inc42 Media.

US-based creditors of BYJU’S have pushed back against founder Byju Raveendran’s claim that the verified debt on the beleaguered edtech startup is only INR 20 Cr, saying that it will have to repay the entire $1.2 Bn term loan B, along with interest.

The lenders represented by Glas Trust have argued that Raveendran and BYJU’S interim resolution professional cannot disqualify any term loan lender, and even if they did, the edtech firm “would still be obligated to repay the full amount of the loan plus interest,” ET reported.

The statement comes on the heels of Raveendran’s claims that BYJU’S interim resolution professional had verified debt claims worth INR 20 Cr only and that the company may not have to pay any money to the US-based lenders represented by Glas Trust due to the latter’s “current behaviour”. 

The US-based lenders of BYJU’S further alleged that the edtech firm has not paid any contractual dues in more than 17 months. According to Glas Trust, BYJU’S still owes the US-based lenders dues worth INR 11,432 Cr ($1.36 Bn).

“Majority lenders today hold more than 64% of the TLB…Byju’s claim that he either does not know who the lenders are or intends to pay primary lenders is illogical and false. He has not paid any principal or interest – be it to majority lenders or those who purchased the loans in the secondary market,” ET quoted the lenders as saying.

It is pertinent to note that Glas Trust has also moved the Supreme Court, challenging a ruling by the National Company Law Appellate Tribunal (NCLAT) that had stayed the bankruptcy proceedings against BYJU’S. The SC has listed the matter for hearing on September 17.

After its ouster from the committee of creditors, Glas Trust had also filed a petition with the National Company Law Tribunal, seeking removal of BYJU’S interim resolution professional Pankaj Srivastava.

While the US-based lender had also sought a stay on further meetings of the CoC amid the ongoing insolvency proceedings against BYJU’S, the tribunal refused to grant it interim relief, citing the August 21 Supreme Court order that allowed its constitution. 

The NCLT asked Glas Trust to file a fresh plea challenging its exclusion from the creditor’s committee if it wished to pursue the matter.

Glas Trust is not the only creditor turning the heat up on BYJU’S. Aditya Birla Finance has also moved the NCLT, reportedly alleging that he committed fraud by wrongfully labelling the lender as an ‘operational creditor’ instead of a ‘financial creditor’.

The post BYJU’S Saga: US Lenders Counter Debt Claim, Say The Edtech Must Repay Full $1.2 Bn Loan With Interest appeared first on Inc42 Media.

Already facing allegations of ‘secretly plotting’ against the US-based lenders of BYJU’S, the edtech firm’s interim resolution professional Pankaj Srivastava has yet again come under scanner — this time due to allegations from Aditya Birla Finance.

The financial services arm of the Aditya Birla Group has moved the National Company Law Tribunal (NCLT) against Srivastava, alleging that he committed fraud by wrongfully labelling the lender as an ‘operational creditor’ instead of a ‘financial creditor’, Mint reported.

For context, financial creditors are those entities or individuals from whom the debtor has obtained loan or debt security. On the other hand, operational creditors supply goods or services to a company for their business operations.

Appearing for Aditya Birla Finance, senior counsel Udaya Holla reportedly informed the tribunal that even as BYJU’S owes the company INR 139 Cr, Srivastava issued a notice in the meeting of committee of creditors fraudulently classifying them as operational creditors.

The Insolvency and Bankruptcy Board of India (IBBI) documents accessed by Inc42 showed that Aditya Birla Finance filed claims worth INR 47.2 Cr, of which 30 Cr has been admitted by the resolution professional.

It is pertinent to mention that financial creditors have the first claim on the assets of a bankrupt company, followed by operational creditors.

The bench of Justices K Biswal and Manoj Kumar Dubey has listed the next hearing on Aditya Birla Finance’s plea against Srivastava on September 24. The resolution professional has been directed to file his objections in a week.

Earlier, Glas Trust — a consortium of US-based lenders that extended a $1.2 Bn term loan B to BYJU’S — also filed a petition before the NCLT against Srivastava, seeking the removal of the interim resolution professional.

Glas Trust claims BYJU’s has still not paid dues worth INR 11,432 Cr ($1.36 Bn).

While the US-based lender had also sought a stay on further meetings of the CoC amid the ongoing insolvency proceedings against BYJU’S, the tribunal refused to grant it interim relief, citing the August 21 Supreme Court order that allowed its constitution. 

The NCLT asked Glas Trust to file a fresh plea challenging its exclusion from the creditor’s committee if it wished to pursue the matter.

Notably, Srivastava earlier ousted Glas Trust from the creditors’ committee of BYJU’S, claiming it did not represent the minimum 51% of the lenders in the consortium.

Meanwhile, tax authorities have also filed claims for INR 848 Cr with BYJU’S resolution professional.

The post Now, Aditya Birla Finance Accuses BYJU’S Resolution Professional Of ‘Fraud’ appeared first on Inc42 Media.

The Supreme Court today (September 11) said that it will hear on September 17 the appeal of US-based creditor Glas Trust Company LLC against a ruling by National Company Law Appellate Tribunal (NCLAT) that had stayed the insolvency proceedings against embattled edtech giant BYJU’S.

A bench led by Chief Justice D Y Chandrachud, along with Justices J B Pardiwala and Manoj Misra, agreed to expedite the hearing following requests from multiple lawyers citing new developments in the case, news agency PTI reported.

The plea regarding insolvency proceedings against BYJU’s was brought up by senior advocate N.K. Kaul, representing the ed-tech company, emphasising the need for an urgent hearing.

Solicitor General Tushar Mehta, representing the BCCI, and senior lawyer Abhishek Singhvi, also supporting BYJU’s, backed this request. Kaul noted that another related plea is also scheduled for hearing on September 17.

The Supreme Court last month overturned the NCLAT’s ruling that quashed the bankruptcy proceedings against BYJU’S and approved an INR 158.9 Cr settlement between the debt-ridden edtech firm and the Board of Control for Cricket in India (BCCI).

This follows the recent postponement by the Bengaluru bench of the NCLT regarding Glas Trust’s petition, which sought to halt further meetings of BYJU’s committee of creditors (CoC).

Glas Trust, part of a consortium of US lenders that had extended a $1.2 billion term loan to BYJU’s parent company in 2021, was reportedly removed from the creditors’ committee shortly after its first meeting on September 3.

BYJU’S, once the poster child of the Indian startup ecosystem, is now grappling with multiple challenges, including mass layoffs, a severe cash crunch, delays in filing financial statements, numerous legal battles, and increasing regulatory scrutiny.

Compounding these issues is a public spat with investors amid escalating losses. The company’s net loss surged 81% year-on-year to INR 8,245.2 crore in FY22.

The post BYJU’S Insolvency Case: SC To Hear Glas Trust’s Plea On Sept 17 appeared first on Inc42 Media.

In another setback to BYJU’S, the embattled edtech major’s second auditor BDO (MSKA & Associates) has resigned amid concerns over “financial” and “governance” issues.

BDO’s exit comes just more than a year after Deloitte, the company’s previous auditor, stepped down citing problems with BYJU’S financial reporting.

The board of BYJU’S initially engaged MSKA & Associates on August 2, 2023, to fill a casual vacancy that had arisen due to Deloitte’s exit. Subsequently, the firm was reappointed on December 20, 2023, as the company’s statutory auditor during the annual general meeting for a duration of five years, spanning from FY23 to FY27. 

In its resignation letter, BDO highlighted several troubling issues, including delays in financial reporting, lack of support from the management and concerns over recovering outstanding dues from a Dubai-based entity.

Specifically, BDO raised doubts about the recovery of approximately INR 1,400 Cr from More Ideas General Trading LLC, a reseller based in Dubai. The transaction was reported to the Ministry of Corporate Affairs on September 2.

BDO also pointed to other challenges facing BYJU’S, such as ongoing litigation, liquidation proceedings initiated by creditors, and allegations of mismanagement by minority shareholders.

Furthermore, BDO stated that BYJU’S failed to provide crucial information, including notices for extraordinary general meetings (EGMs) and insolvency proceedings, to its audit team.

Following resignation, the edtech startup released an official statement saying, “BYJU’S has complied with every request made by BDO, except those that would require crossing ethical and legal boundaries. The real reason for BDO’s resignation is BYJU’S firm refusal to backdate its reports, while BDO went to the extent of recommending a firm that could facilitate such an illegal activity.”

“Multiple call recordings exist, where BDO representatives explicitly suggest backdating these documents, which BYJU’S refused to do. BYJU’S strongly believes that this is the main reason for their resignation,” the statement added.

This comes amid BYJU’S facing a heap of legal challenges, which include a recent Supreme Court ruling to recommence insolvency proceedings against the startup.

BYJU’S entered insolvency proceedings on July 16, 2024, due to a legal dispute with the Board of Control for Cricket in India (BCCI). This led to the appointment of an Insolvency Resolution Professional (IRP) and the suspension of the company’s Board. 

The following day, on July 17, BDO emailed the suspended board requesting clarification on historical transactions with a Middle Eastern partner. In the same email, BDO threatened to resign if the clarifications were not provided within 45 days.

BDO eventually resigned after the 45-day window expired, citing the suspended board’s failure to provide the requested clarifications. However, surprisingly, the BDO failed to appreciate that for most of that 45-day period, the IRP was in control of BYJU’S and only the IRP could provide the answers they were seeking. 

During a Committee of Creditors meeting on September 3, 2024, the IRP reported attempts to contact BDO for clarification but received no response, raising concerns about BDO’s communication practices.

Regarding the Middle Eastern transactions, BYJU’S clarified that a forensic audit was arranged and supervised by BDO before the insolvency proceedings. The audit could not be completed due to the insolvency initiation, but a prior audit had cleared these transactions. 

A BDO senior partner has also confirmed on video that after conducting thorough due diligence, they have found no evidence of fraud or malpractice in our international transactions, the company added in the statement.

The post BYJU’S Auditor MSKA Resigns Over ‘Financial’ & ‘Governance’ Concerns appeared first on Inc42 Media.

Amid the ongoing insolvency proceedings of BYJU’S, Glas Trust, a consortium of the edtech’s term loan B (TLB) lenders, has claimed dues to the tune of INR 11,432 Cr ($1.36 Bn). 

This accounts for nearly 88% of the total claims filed by the company’s creditors. It is pertinent to note that a clutch of US-based creditors lent the company $1.2 Bn TLB in November 2021 to fund its overseas operations.

Meanwhile, the edtech major’s wholly owned subsidiary and coaching chain Aakash Educational Services Ltd (AESL) has filed a claim of INR 1,404 Cr ($167 Mn). 

As per Insolvency and Bankruptcy Board of India (IBBI) documents accessed by Inc42, AESL and Glas Trust have been listed as “unsecured financial creditors” of the troubled edtech’s parent, Think & Learn Pvt Ltd. 

At present, the troubled edtech major is being run by the court-appointed resolution professional, Pankaj Srivastava, who has invited lenders, employees, vendors and the government to claim their respective outstandings. 

So far, claims worth over INR 13,027 Cr have been received from 1,887 creditors, most of which are still under review.

Who Are The Unsecured Financial Creditors?

As per IBBI documents, fintech major InCred Financial Services has claimed dues to the tune of INR 20.34 Cr. Notably, the IRP has admitted the entire claim filed by InCred against BYJU’S.

Another entity, Anglo Asia, has filed a claim to claw back a “loan” worth INR 810 Cr to BYJU’S. 

List of Operational Creditors Of BYJU’S 

As many as 95 entities listed as “operational creditor” of the edtech startup have filed claims worth INR 425.12 Cr against BYJU’S. Of these, the IRP has admitted the claims of just one company, Aditya Birla Finance.

The financial services arm of the conglomerate filed claims worth nearly INR 47.12 Cr against the edtech startup, of which nearly INR 30 Cr was admitted by IRP Srivastava. 

Kalyani Techpark, where the company’s Bengaluru office was once located, has also sought more than INR 190 Cr in dues from BYJU’S through its multiple entities. Notably, Surfer Technologies, which settled its insolvency case with BYJU’S in June 2024, also figures in the list of operational creditors and has staked claim for INR 1.25 Cr. 

Additionally, Chinese smartphone makers OPPO and Vivo have also filed claims worth INR 16.64 Cr and INR 5.33 Cr, respectively. 

Meanwhile, both central and Karnataka tax authorities, spanning various departments, have filed claims for dues worth more than INR 848 Cr with the IRP. On top of that, as many as 1,784 employees of BYJU’S have filed claims worth INR 301 Cr against the once poster child of the edtech ecosystem. 

After raising billions of dollars from investors at the height of the pandemic in 2021, BYJU’S went on a downhill path as soon as capital dried up with the onset of funding winter. Meanwhile, reckless expansion and fruitless acquisitions led to ballooning losses even as revenues failed to grow commensurately. 

As a result, the company undertook major steps to cut costs, including mass layoffs, restructuring operations and shutting down centres, but to no avail. Making matters worse were delayed salaries, slew of legal and insolvency cases and a public standoff with investors. 

The post BYJU’S Insolvency Proceedings: TLB Lenders Make Claim For INR 11,432 Cr Dues appeared first on Inc42 Media.

Troubles of BYJU’S seem far from over. Indian tax authorities have sought dues worth over INR 848 Cr ($101 Mn) from the edtech major as part of the company’s ongoing insolvency proceedings. 

As per the Insolvency and Bankruptcy Board’s documents seen by Inc42, the Central Board of Indirect Taxes and Customs (CBIC) has filed a claim worth INR 157 Cr ($18.7 Mn) before the insolvency resolution professional Pankaj Srivastava and Karnataka Commercial tax Department has sought dues worth INR 691 Cr ($82.3 Mn). 

The document described the outstanding amounts as “statutory dues”, without further elaboration.

This amount effectively implies the total amount local authorities believe that BYJU’S owes them. This comes after months of complaints against the company for delays in paying salaries and layoffs. 

The development was first reported by Reuters.

At present, the troubled edtech major is being run by the court-appointed resolution professional, Srivastava, who has invited lenders, employees, vendors and the government to claim their respective outstandings. 

So far, claims worth over INR 13,027 Cr have been received from 1,887 creditors, most of which are still under review.

Meanwhile, Glas Trust, a consortium of the edtech’s TLB lenders, has filed the biggest claim at over INR 11,432 Cr, while BYJU’S wholly owned subsidiary Aakash Education Service has also claimed dues worth INR 1,404 Cr. 

With this, the once poster child of the edtech ecosystem continues to be roiled in choppy waters. The company has been on a downslide for the past two years, having fired more than 5,000 employees and delayed salaries of its workforce multiple times. 

On top of the capital crunch, mounting losses, multiple legal and insolvency cases and saturating growth too have wreaked havoc on the company. 

The post Amid Ongoing Insolvency Woes, Tax Authorities Seek $101 Mn In Statutory Dues From BYJU’S appeared first on Inc42 Media.

The Supreme Court has reportedly agreed to an early hearing of Glas Trust Company LLC’s plea against the NCLAT’s decision to stay insolvency proceedings against the embattled edtech giant BYJU’S and approve its INR 158.9 Cr settlement with the BCCI.

As per a PTI report, a bench led by Chief Justice D Y Chandrachud, along with Justices J B Pardiwala and Manoj Misra, was urged by senior advocate NK Kaul to expedite the hearing of BYJU’S case. 

Kaul said, “The only funding has been provided by the promoters, and there has been no external borrowing. We need to demonstrate how malicious the US firm’s petition is.” The CJI, who had been indisposed and in quarantine recently, responded, “I will have the case listed as soon as possible.”

It is pertinent to note that the Supreme Court last month overturned the NCLAT’s ruling that quashed the bankruptcy proceedings against BYJU’S and approved an INR 158.9 Cr settlement between the debt-ridden edtech firm and the Board of Control for Cricket in India (BCCI). 

This comes days after the Bengaluru bench of the National Company Law Tribunal (NCLT) postponed its verdict on Glas Trust’s petition seeking a stay on further meetings of the committee of creditors (CoC). 

Glas Trust, a consortium of US-based lenders that extended a $1.2 Bn term loan B to BYJU’S parent company Think & Learn Pvt Ltd in 2021, was reportedly ousted from the creditors’ committee within minutes of its first meeting on September 3.

On August 22, the SC refused to issue an interim order to halt meetings of the committee of creditors (CoC) related to BYJU’S insolvency proceedings, scheduling a final hearing for August 27. Earlier, on August 14, the court had stayed the NCLAT verdict that had halted insolvency proceedings and approved BYJU’S INR 158.9 Cr settlement with the BCCI, calling the NCLAT’s decision “unconscionable.”

The case stemmed from BYJU’S default on an INR 158.9 Cr payment related to a sponsorship deal with the BCCI. The court directed the BCCI to keep the settlement amount in escrow until further orders.

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