BYJU'S vacates offices in Bengaluru amid funding crunch
What's the story
There is no end to BYJU'S troubles. The company has been dealing with issues on different fronts, including investors, lenders, and regulators. Now, according to Moneycontrol, the tech giant has vacated its offices in Bengaluru. This includes the 5.58 lakh square feet property in Kalyani Tech Park, one of the start-up's largest office spaces in the city. Let's see what led to this.
Context
Why does this story matter?
The past 18 months have been filled with ups and down for BYJU'S. From hitting a record-high valuation of $22 billion to legal tussles with creditors, the start-up has seen it all. Meanwhile, the company's efforts to raise new funds are yet to bear fruit. Vacating office spaces in Bengaluru seems to be related to that.
Offices
BYJU'S has 3 offices in Bengaluru
BYJU'S has three offices in Bengaluru. These include two buildings in Kalyani Tech Park at Brookfield, nine floors in Prestige Tech Park at Kadubeesanahalli, and IBC Knowledge Park at Bannerghatta. The company leased two buildings in Kalyani Tech Park named Magnolia and Ebony in June last year. They were leased with a lock-in period of three years.
Vacated
Company vacated most of its space in Kalyani Tech Park
BYJU'S vacated Magnolia last month and shifted employees to Ebony. Now, it has decided to vacate Ebony as well. The company had leased five floors in Magnolia and six in Ebony. Per Moneycontrol, it has already vacated four out of six floors in Ebony. The remaining two will be vacated by August. It has also vacated two floors in Prestige Tech Park.
Official words
Rented spaces are being vacated to boost operational efficiency: BYJU'S
BYJU'S confirmed the development. The start-up attributed to improving efficiency. "BYJU'S has over three million square feet of rented spaces across the country to support its requirements. Expansion and reduction in office space is based on changes in working policies and business priorities which is very regular and is aimed at boosting operational efficiencies," a company spokesperson said.
Reason
BYJU'S is trying to cut costs by vacating offices
BYJU'S move to vacate office spaces puts into perspective the financial stress the company has been in. The firm has been in talks with investors to raise about $1 billion. However, there hasn't been any progress on that front. Vacating the office space in Kalyani Tech Park would save the start-up around Rs. 30 million in monthly rent.