Major investors of the once-celebrated edtech giant, Byju’s, are demanding a leadership overhaul as the company’s valuation tumbles from $22 billion to a mere $250 million in less than two years.
In a significant development, a faction of Byju’s major investors, including Prosus, Peak XV Partners, Sofina, and Chan Zuckerberg Initiative, has initiated an extraordinary general meeting (EGM) notice to discuss a revamp of the company’s board and a change in leadership. This move comes amidst growing concerns about the company’s stability under the current leadership, as stated in a statement issued by the investors on Thursday.
The existing board includes Byju Raveendran, his brother Riju Ravindran, and co-founder Divya Gokulnath. The investors assert that persistent issues related to corporate governance, mismanagement, and compliance have prompted this call for change.
The EGM notice follows months of failed attempts by shareholders to engage with the company, with previous requisition notices disregarded in July and December 2023. The strained relationship between Byju’s and its investors intensified following allegations of corporate governance lapses, with investor Prosus accusing the leadership of routinely ignoring its advice on crucial business matters.
Last June, representatives from Prosus, Peak XV Partners, and Chan Zuckerberg Initiative stepped down from Byju’s board, reflecting the long-standing desire of investors for Raveendran to relinquish control over day-to-day operations.
Once a formidable force in edtech, Byju’s, aiming to revolutionise learning for school kids, has faced financial challenges. The company, currently in a rights issue to raise $200 million at a valuation of approximately $225 – $230 million, has also been dragged to the insolvency tribunal by foreign lenders over a $1.2 billion term loan that remains unpaid since 2021.
As the EGM looms, the fate of Byju’s leadership and its future direction hang in the balance, leaving stakeholders and the edtech community awaiting crucial developments.
