The Goal of Byju's shareholders is to fire founder Byju Raveendran

By Consultants Review Team Friday, 02 February 2024

The shareholders of the ed-tech startup Byju's want to remove the founders and replace the executive team. This follows the edtech behemoth's thousands of employee layoffs and precipitous decline in its valuation. Byju's, owned by billionaire Byju Raveendran, was among the hottest companies just two years prior, in 2022. The shareholders expressed their "deep concern" about the company's stability going forward under the existing management. 

Prosus Ventures, which owns a 9% investment in Byju's, released the statement and claimed to have the support of additional shareholders, albeit they did not identify them. Sofina and Peak XV, formerly known as Sequoia Capital India, reportedly approved the statement, according to a Reuters story. 

A report published in Livemint stated that in order to suggest a reconstitution of the Byju's board, General Atlantic, Prosus Ventures, Peak XV, and the Chan Zuckerberg Initiative, among others, called for an emergency general meeting. It cited an insider to disclose that the notice was sent to Byju's following the company's inaction on an EGM demand notice that was initially received in July and then again in December. They claimed that calling the EGM was in the best interests of the business and its owners.

To create a leadership narrative, the investors called the meeting to resolve concerns related to governance, management, and compliance as well as to reorganize the board "so that it is no longer controlled by the founders." 

Deloitte's resignation as Byju's auditor meant that the company's problems persisted for the most of last year. Despite writing to the board multiple times, Deloitte claimed that it had not received the required documentation. The financial statements for the year that concluded on March 31, 2022, were postponed by Byju's.  Last year, three board members from Byju's board—Peak XV, Prosus, and the Chan Zuckerberg Initiative—resigned.

In a previous letter to shareholders, Raveendran had quoted William Ernest Henley's "Invictus" and declared, "In the clutch of circumstance I have not winced nor cried aloud." "Despite the blows from fate, my head is not bent, even though it is bloody." He stated in the letter that the company will have the resources it needs to restructure and grow if a swift capital raise is completed. He declared, "This will be used to manage obligations, carry out business operations, and strengthen the company's sustainability."

Some investors estimated that Byju's, one of the most successful startups in the ecosystem, had lost between $1 billion and $3 billion in valuation.


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