BYJU’s investors call for oustering Raveendran

Embattled edtech BYJU’s investors have called for an extraordinary general meeting to discuss a change in the company’s leadership.

The investors, namely Prosus, General Atlantic, Peak XV, Sofina and Chan Zuckerberg among others have issued the notice for oustering founder Byju Raveendran, as well as his wife Divya Gokulnath and brother Riju Raveendran.

The company had launched a rights issue fundraise worth about Rs 1,600 crore, preferring operational sustainability over valuation. 

Blackrock had cut BYJU’s valuation to about $1 billion, down 95 per cent from the $22 billion it raised in October 2022. Before this, Prosus in November had cut the edtech’s valuation to under $3 billion

"We are deeply concerned about the future stability of the company under its current leadership and with the current constitution of the Board," the shareholders said in a statement. 

Prosus, which has close to a 9 per cent stake in the edtech firm, stated it had a backing of a "number of major investors" without naming them. 

Others supporting the statement include Sofina and Peak XV, according to a source with direct knowledge of the matter.

BYJU's is struggling from governance and financial issues, especially after the post-pandemic edtech slump. It faces legal troubles from its overseas lenders for a Term Loan B. 

"The issuance of this EGM notice follows many months of continued efforts by shareholders to engage with the company to address persistent issues relating to corporate governance, mismanagement and compliance. These efforts have been ongoing following the resignation from the board in June 2023 of directors nominated by Prosus and other shareholders," the investors stated.

BYJU's had roped in former SBI MD Rajnish Kumar and former Infosys CFO Mohandas Pai as advisors. Pai's Aarin Capital is also an investor in the edtech firm, which had acquired Aakash Institute, a brick-and-mortar coaching giant.

Expressing doubt over the company's stability, the shareholders said they are “deeply concerned” about the future stability of the company.

“We also continue to believe in the role and contribution of Byju's. As shareholders, we will continue to assert our rights, in collaboration with other shareholders and government authorities to safeguard the long-term interests of the company and its stakeholders,” the investors said.