New Delhi: Byju’s, once India’s most valuable startup valued at a staggering USD 22 billion, is facing a major financial setback. The National Company Law Tribunal (NCLT) in Bengaluru has initiated insolvency proceedings against the edtech company for failing to pay a sponsorship debt of Rs 158.9 crore (approximately USD 19.3 million) to the Board of Control for Cricket in India (BCCI).
This development comes as a significant blow to Byju’s, which has been grappling with financial troubles in recent times. The company reportedly missed financial reporting deadlines two years ago and fell short of its revenue projections by a significant margin.
What Led to Insolvency Proceedings?
The NCLT order stems from a sponsorship agreement signed between Byju’s and the BCCI in July 2019. As per the agreement, Byju’s secured exclusive rights to display its brand logo on the Indian cricket team’s jersey, advertise during cricket series telecasts, and receive hospitality and non-hospitality tickets for BCCI-organized matches.
ALSO READ: Cricket Ads Shine Brighter Than Ever: India Dominates ICC T20 World Cup 2024 Ad Landscape
However, Byju’s allegedly defaulted on its payment obligations after March 2022. While the company made a full payment for the India-South Africa series held in June 2022, it failed to settle dues for subsequent series and tournaments, including the Asia Cup and ICC T20.
Byju’s reportedly attempted to negotiate for extensions on the payment deadlines but ultimately failed to meet its financial commitments. The BCCI, unable to recover the outstanding amount, approached the NCLT, leading to the current insolvency proceedings.
Byju’s Response and Future Outlook
Byju’s has expressed a desire to reach an “amicable settlement” with the BCCI and is confident of resolving the issue despite the NCLT order. The company’s spokesperson highlighted their ongoing legal review and plans to take necessary steps to protect their interests.
However, Byju’s also faces a separate legal battle with its investors in Think and Lean (T&L), the parent company. The investors have accused the company’s management of mismanagement and failures, leading to attempts to remove CEO Byju Raveendran from his position.
With ongoing financial troubles, legal battles, and investor disputes, Byju’s future remains uncertain. The company will need to navigate these challenges effectively to overcome its current financial crisis and regain its once-prominent position in the edtech sector.
