Byju’s investors seek to remove edtech group’s founder
Reading Time: 2 minutesA group of large investors in Byju’s has called for an extraordinary general meeting where they seek to change the leadership at Byju’s days after the edtech group launched a rights issue at $25 million pre-money valuation.
The consortium of investors said it has called for the EGM following ‘many months of continued efforts’ to address the ‘persistent issues’ at Byju’s, which at the time of its last fundraise in 2022 was the most valuable edtech globally. It initially issued the request for EGM in December before the rights issue.
At the meeting, Byju’s investors said they are seeking a resolution of the ‘outstanding governance, financial mismanagement and compliance issues; the reconstitution of the Board of Directors, so that it is no longer controlled by the founders of T&L; and a change in leadership of the Company.’
Tension between the investors at Byju’s founders has escalated in the past year over governance issues, which in part prompted Prosus, Peak XV and Chan Zuckerberg Initiative to abruptly resign from the startup’s board last year. Global auditor Deloitte also resigned, airing a series of grievances.
The call for the EGM follows Byju’s, the most valuable Indian startup, cutting its valuation ask by 99% in a rights issue it launched earlier this week to meet its liabilities and operational costs. The startup said it was looking to raise $200 million in the rights issue, capital it said was ‘essential to prevent any further value impairment.’
The startup reset its valuation to $25 million pre-money valuation in the rights issue, according to sources familiar with matter. Byju’s has raised over $5 billion in debt and equity.
In a letter to shareholders earlier this week, Byju’s founder Byju Raveendran sought investors’ continued support and said the founders had made ‘immense personal sacrifices for the sake of the company.’ He added: ‘We have spent our lives building this company and are fervent believers in its mission.’
Raveendran said in the letter that he and other founders of the edtech group had invested $1.1 billion — much of it borrowed capital — into the Bengaluru-headquartered startup in the last 18 months.
Full statement from the investor consortium:
Ref: techcrunch
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