Byju's offloads US assets at steep loss amid mounting financial crisis

Byju's subsidiaries Epic and Tynker were acquired by TAL Education and CodeHS for $95 million and $2.2 million after a 48-round auction, as a part of ongoing bankruptcy proceedings in the US

 

Troubled ed-tech firm Byju’s has been forced to sell two of its US-based assets, Epic and Tynker, at steep losses. A bankruptcy court in Delaware, US approved the distress sale, with Epic sold for $95 million and Tynker for just $2.2 million.

 

Byju’s had purchased Epic in 2021 for $500 million and Tynker for $200 million. Epic has now been acquired by China’s TAL Education Group, while online learning platform CodeHS has taken over Tynker after a 48-round competitive auction, according to EdWeek Market Brief.

 

Part of bankruptcy proceedings 

These sales are part of ongoing bankruptcy proceedings in the United States involving Byju’s subsidiaries: Epic, Tynker, and Osmo. The sales aim to help recover part of a $1.2 billion term loan given to Byju’s. The company defaulted on the loan over 17 months ago, prompting a series of legal disputes.

 

All three US subsidiaries served as guarantors for the syndicated loan, which has now come under intense scrutiny.

 

Expansion strategy backfires 

Byju’s had bought the US platforms during the Covid-19 pandemic as part of an ambitious international expansion. However, this strategy, driven by debt, has now collapsed, putting the company in crisis.

 

‘Byju’s now worth zero’: HSBC

 

HSBC has valued global tech investor Prosus’ nearly 10 per cent stake in Byju’s at zero. Prosus had invested $500 million in the ed-tech company. In a note to investors on 21 May, HSBC said, “We assign zero value to Byju’s stake amid multiple legal cases and funding crunch.”

 

History of Byju’s troubles

 

In February 2024, a group of shareholders, including Prosus, accused Byju’s of “financial mismanagement and compliance issues”. They demanded the removal of founder and CEO Byju Raveendran and a complete board overhaul. Auditing firm Deloitte also resigned, citing delays in receiving financial statements for the year ending March 2022. Deloitte said repeated requests to the board for required documents went unanswered. Critics and former auditors have kept raising concerns about corporate governance.