Byju’s, the struggling edtech company, has decided to temporarily suspend its three-year partnership with renowned footballer Lionel Messi. In 2022, the edtech company signed a deal with the Argentinian footballer, which sparked criticism due to the company’s previous layoffs of thousands of employees.
As per a report in The Economic Times, an unnamed executive revealed that Byju’s has covered Messi’s contract for the initial year. However, it remains uncertain whether the deal will be terminated prematurely or if the edtech company will eventually renew the contract. The executive claimed that a liquidity crisis and other urgent company issues were the driving forces behind the decision.
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Messi will serve as the organization’s global ambassador for three years, according to a November 2022 announcement from Byju Raveendran’s company. This collaboration is part of their ‘education for all’ campaign. It was estimated that Messi was signed for a substantial amount of money, ranging from $5 to $7 million per year.
However, when Byju’s announced the campaign, it faced a significant amount of criticism. It had come just a month after the edtech company had to let go of nearly 2,500 employees.
In a surprising turn of events, Byju’s has decided not to renew its endorsement contract with actor Shah Rukh Khan, which came to an end in the middle of 2023. According to industry executives, both parties agreed on the decision because Khan preferred not to be affiliated with the company due to its ongoing regulatory scrutiny, as mentioned in the report.
Byju’s is currently facing a significant crisis as some shareholders are seeking to remove founder Byju Raveendran and implement a change in leadership. The shareholders expressed significant apprehension regarding the long-term stability of the company. Prosus, which holds a 9 percent stake in the company, publicly announced the statement. According to a report by Reuters, Sofina and Peak XV, formerly known as Sequoia Capital India, have expressed their support for the statement.
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Byju’s has addressed the request for a change in leadership by stating that the investors who are advocating for Raveendran’s departure do not possess voting rights.
Additional reports indicated that the company has decided to postpone the payment of January salaries to its employees. In a letter to the employees on Sunday, Raveendran announced that he had successfully credited all pending salaries. “I understand that you were informed about receiving your salaries by Monday. “There was no need for you to wait until Monday. I have been working tirelessly for months to ensure that payroll is met, and this time, the challenge was even greater to ensure that you receive what you rightfully deserve,” Raveendran said in this letter, as reported in Moneycontrol.
