Edtech company Byju’s’ shareholders are seeking to oust the company’s founders and bring in a change to its leadership. This comes after the edtech giant laid off thousands of employees and saw its valuation take a nosedive. Just two years ago, in 2022, Byju’s was one of the hottest startups, controlled by billionaire Byju Raveendran.
The shareholders acknowledged that they were “deeply concerned” about the future stability of the company under the current leadership.
The statement was put out by Prosus Ventures, which has 9 per cent stake in Byju’s, and who said that they have the backing of other shareholders without naming them. As per a Reuters report Sofina and Peak XV, formerly known as Sequoia Capital India supported the statement.
According to a report in Livemint, General Atlantic, Prosus Ventures, Peak XV and Chan Zuckerberg Initiative, as well as others called for an extraordinary general meeting to propose a reconstitution of the Byju’s board. It quoted a person in the know who revealed that the notice was sent to Byju’s after the company failed to act on an EGM requisition notice that was first sent in July and then in December. They said that the EGM was called upon in the interest of the company and its shareholders.
The meeting was requested by the investors to solve governance, management and compliance issues and reconstitute the board “so that it is no longer controlled by the founders” leading to a leadership story.
Byju’s’woes continued for the large part of last year after Deloitte resigned as its auditor. Deloitte said that it did not receive the necessary documents even after writing several times to the board. Byju’s had delayed the financial statements for the year ended March 31, 2022.
Board members representing Peak XV, Prosus and Chan Zuckerberg Initiative stepped down from Byju’s board last year.
Raveendran had earlier invoked William Ernest Henley’s ‘Invictus’ in a letter to shareholders and said: “In the clutch of circumstance I have not winced nor cried aloud. Under the bludgeonings of chance, ‘My head is bloody, but unbowed.’” In the letter he said that an expeditious capital raise will provide the company with the resources it needs to rebuild and scale. “This shall be used for the continuation of business operations, to manage obligations and to make the company more sustainable,” he said.
Byju’s, one of the brightest success stories of the startup ecosystem, saw its valuation fall to between $1 billion and $3 billion, as per the estimates of some investors.
(With Reuters inputs)
Also read: My head is bloody, but unbowed: Byju Raveendran writes to shareholders
Also read: Trouble mounts for Byju’s as company’s American arm files for bankruptcy
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