Byju, India’s best-known information technology company, has left its biggest office in Bengaluru, as it seeks to cut costs and increase liquidity despite funding delays. He also gave away a portion of other office space in the city, sources said.
Byju`s owns three offices in Bengaluru, including the 5.58 lakh square foot property in the Kalyani Tech Park that she vacated. The company has asked employees to work at other facilities or from home from July 23, at least six employees confirmed to Moneycontrol. Employees said the company also gave up two of the nine floors it owns at Prestige Tech Park. “Byju`s has more than 3 million square feet of leasable space across the country to meet its needs. Office expansions and reductions are based on changes in work policies and business priorities that are very frequent and aimed at increasing operational efficiency,” a Byju`s spokesperson said. The company leased two buildings – Magnolia and Ebony – at the Kalyani Tech Park in Brookfield last June. He left Magnolia last month, transferring staff to Ebony. It has asked all employees to work from Prestige Tech Park and its main office on Baneghatta Main Road, employees told Moneycontrol. Kalyani Tech Park security officer confirmed the development and said the company will leave Ebony in August. Byju’s has rented five floors of Magnolia and six floors of Ebony. According to agents and security officials, he left four of Ebony’s six floors last week and will leave the rest in August.
Over the weekend, Moneycontrol visited Kalyani Technology Park and the other two offices in Byju – IBC Knowledge Park, Bannerghatta and Prestige Technology Park, Kadabeesanahalli – to confirm the development.
The company leased these spaces for three years. By vacating an office space of approximately 5.58 lakh square feet, the company will save nearly Rs 3 billion in monthly rent.
Byju’s decision to leave office is significant as it highlights the financial stress of the country’s most beloved unicorn, which is already grappling with a variety of issues, including a struggle with lenders. Byju’s is considering a cash injection of more than $700 million since the start of the year, but the company hasn’t been able to close it.
Last month, Byju’s was examined by the Employee Provident Fund (EPFO) for failing to pay PF fees, in another case highlighting the business’ cash flow problems. Even in June, the company only paid the savings fund (PF) for 738 employees, even though it had agreed with EPFO to pay by July 15 at the latest. During May, the company issued PF payments to nearly 25,000 employees, according to data from the official EPFO portal. Byju also laid off more than 1,000 employees last month, as part of another cost-cutting initiative. On July 22, Moneycontrol reported that the company held an emergency meeting at the town hall with the Byju Tuition Center (BTC) staff, during which they pledged not to make any further layoffs at BTC. BTC employees have been planning an India-wide rally for July 25 amid speculation about further layoffs.
Byju hit a new high last March when it raised a whopping $800 million in funding at a $22 billion valuation. The company, which has backers such as Peak XV Partners (formerly Sequoia Capital India), Prosus and Sofina, among others, has recently fallen on hard times following the resignation of its auditor and the departure of three key members of its board.
But since then, the company has been criticized for a number of other reasons, including accounting irregularities, disputes with lenders, mass layoffs and growing losses. Byju’s offices in Bengaluru were also raided by the Enforcement Branch, a financial investigation agency, in April under the provisions of the Foreign Exchange Management Act. The company has not yet submitted the audit results for the fiscal year 2021 (2021-22).
For Fiscal Year 21 (2020-21), Byju’s reported a sharp increase in losses to over Rs 4,500 crore, while its revenue fell slightly, which is surprising given that Fiscal Year 21 was the first year of Covid giving e-learning businesses an edge.
Byju’s fair value was also internally reduced twice by BlackRock, the world’s largest asset management company (AMC). BlackRock has now pegged Byju’s fair value at $8.4 billion, about 62 percent less than Byju’s most recent valuation of $22 billion. Founded over a decade ago by former teacher Byju Raveendran, Byju`s has raised more than $5 billion, most in the past five years.
