What’s brewing at BYJU’S? Auditor resigns, board left with only 3 members

Problems with the EdTech platform BYJU'S seem not to be getting over anytime soon. Among the latest set of troubles facing the unicorn are that its auditor Deloitte has resigned and three board members have stepped down amid legal fights with lenders.

The departures mean Byju's board now only comprises the founder's family - Chief Executive Byju Raveendran, his wife Divya Gokulnath, and brother Riju Raveendran, news agency Reuters reported, citing sources.

Deloitte said in a letter to Byju's board it was resigning because the company had delayed financial statements for the year ending March 31, 2022. Deloitte said it did not receive the necessary documents even after writing several letters to the board. Byju's has not commented on this.

Last year, Deloitte approved Byju's 2020-21 accounts after it asked the company to change the way it classifies certain revenue entries.

Separately, three board members of Byju's - representing investors Peak XV Partners (earlier Sequoia Capital India), Prosus and Chan Zuckerberg Initiative - stepped down, without giving a reason.

Meanwhile, the Ministry of Corporate Affairs (MCA) has ordered an inspection of BYJU's due to concerns related to corporate governance lapses.

BYJU'S expanded its business at a breakneck pace when Covid-19 induced lockdowns led to high demand for remote EdTech services. The company made a slew of acquisitions in India and the US. In India it acquired Aakash, a provider of coaching services for medical and engineering entrance exams, and WhiteHat Jr, which provides coding training service among others. The company attracted billions of dollars from investors across the globe while it was in expansion mode.

Byju Raveendran-backed EdTech platform was once at a time valued at $22 billion. 

Here are the top acquisitions made by companies till date:

• Aakash Educational Services - Byju's bought IPO-bound Aakash, which offers coaching for various competitive exams across India, for $950 million in 2021.
• Great Learning - Byju's acquired Great Learning, which counts Indian cricketer Virat Kohli as an ambassador, in 2021 for $600 million. It offers online learning materials for professional and higher education courses.
• WhiteHat Jr - WhiteHat Jr specialises in offering classes on online coding to students aged 6-18, and Byju's bought it for $300 million in 2020.
• Toppr - It offers exam-preparation materials for school children in India. Byju's bought it for $150 million in 2021.
• Osmo - US-based Osmo offers educational learning games for children aged 3-8, and was acquired by an Indian company for $120 million in 2019.
• Epic - The California-based reading platform Epic was acquired by Byju's for $500 million in 2021 as part of its plans to expand its US footprint. Epic has more than 40,000 audio books and videos.

Here are BYJU’S top investors till date:

• Blackrock invested in 2020, but has twice slashed the value of its investment in recent months.
• Naspers, now known as Prosus, had parked $536 million in Byju's since 2018 and holds a 10 per cent stake.
• Peak XV, formerly Sequoia Capital India, is among early backers.
• General Atlantic first invested in Byju's in late 2018, with $200 million. 
• UBS invested about $150 million during the pandemic, in 2021.
• Qatar's sovereign wealth fund participated in the Indian startup's funding round of $250 million last year.
• Chan-Zuckerberg Initiative of Meta founder Mark Zuckerberg and philanthropist Priscilla Chan participated in a 2016 investment round.

In the past, the EdTech giant has announced multiple layoff decisions. BYJU'S has also laid off almost 1,000 employees at the start of this year, which included top-level employees who were drawing huge salaries. 

(With inputs from Reuters)