Byju’s, the leading edtech giant in India, is facing yet another setback as its Chief Financial Officer (CFO), Ajay Goel, resigns just six months after joining the company. The announcement comes amidst a series of challenges the startup is currently grappling with, including delayed audit formalities and financial difficulties.
Key Takeaway
Byju’s, the edtech giant in India, faces challenges as its CFO resigns amidst delayed audit formalities and financial difficulties. The company has appointed a new CFO and a senior advisor to address the setbacks. Byju’s is currently dealing with a
.2 billion loan and conflicts with lenders. It has also faced criticisms from stakeholders and previous challenges such as delayed financial accounts and job cuts.
New CFO Appointment and Senior Advisor
In response to Goel’s resignation, Byju’s has appointed Pradip Kanakia, an industry veteran, as a senior advisor. Additionally, Nitin Golani, the current President of the startup’s finances, has been elevated to the position of CFO.
“I thank the founders and colleagues at Byju’s for helping me assemble the FY22 audit in three months. I appreciate the support received during a short but impactful stint at Byju’s,” said Goel in a statement.
Challenges and Issues
Byju’s, once valued at up to $50 billion and considered India’s most valuable startup, is currently facing a multitude of challenges. These include governance, financial, and optics issues that are posing significant obstacles to its growth.
One of the major challenges Byju’s is currently dealing with involves a $1.2 billion term-B loan from a group of lenders. Additionally, the startup is facing a conflict with Davidson Kempner, which had originally agreed to extend $250 million credit to Byju’s but is now seeking payment over the execution of a technical default clause.
This is not the first time Byju’s has experienced such setbacks. Earlier this year, Deloitte quit as the startup’s auditor, and three key board members also resigned. Furthermore, Prosus, an early investor with a stake of over 9% in Byju’s, publicly criticized the company for its lack of evolution and failure to heed investor advice and recommendations.
Delayed Financial Accounts and Job Cuts
Byju’s has a history of delaying the filing of its financial accounts. Deloitte, in its resignation letter, expressed concerns about the lack of communication regarding the resolution of the audit report for the financial year ending March 31, 2021. The startup has also delayed filing its financial accounts for the financial year ending March 2022.
In response to market conditions, Byju’s has already cut over 10,000 jobs. The company is also planning to sell many of the businesses it acquired in 2020 and 2021 to repay its dues to lenders.
