Byju’s U.S. Unit Files for Chapter 11 Bankruptcy, Cites Liabilities of $1-10 Billion

• ByStartupStory     |    February 2, 2024

Byju’s, the Indian ed-tech giant, has faced a significant setback as its U.S. unit, Byju’s Alpha, has filed for Chapter 11 bankruptcy proceedings in the U.S. court of Delaware. The filing revealed that the unit listed liabilities ranging from $1 billion to $10 billion and assets in the range of $500 million to $1 billion. The court document also indicated that the unit had an estimated 100 to 199 creditors.

Founded by Byju Raveendran, the company was once valued at $22 billion in 2022, making it one of India’s most valuable startups. However, recent developments have seen lenders initiating bankruptcy proceedings against it, with some investors claiming that the company’s valuation has plummeted to between $1 billion and $3 billion.

In response to its financial challenges, Byju’s announced plans to raise $200 million through a rights issue of shares to address immediate liabilities and cover operational costs. The company has been actively negotiating the repayment of a $1.2 billion term loan in recent months and has undergone significant workforce reductions, laying off thousands of employees.

Apart from its financial struggles, Byju’s has also come under scrutiny from Indian authorities over alleged violations of the country’s foreign exchange laws. These challenges have cast a shadow over the once-promising trajectory of the ed-tech company, signaling a turbulent period ahead as it navigates its financial restructuring and regulatory hurdles.

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