Even as Byju’s is staring at brink after a 99% drop in valuation, a coup might be afoot at the beleaguered ed-tech company.
Byju’s investors have requested an EGM (Extraordinary General Meeting) of the company seeking to replace founder Byju Raveendran and change the board. Sources have reportedly said that the statement is on behalf of shareholders including Prosus, Peak XV, Sofina, Lightspeed and General Atlantic. Just this week, Byju’s had approved of a rights issue which had valued the company at just $225 million, down 99 percent from its peak valuation of $22 billion.
“Pursuant to the rights granted to shareholders under the Companies Act, 2013, a notice has [today] been issued to Think & Learn Private Limited (T&L) shareholders requesting an extraordinary general meeting (EGM) to address persistent issues,” the statement by Byju’s investors says. “The request for an EGM is supported by a consortium of T&L shareholders and follows earlier notices of requisition sent to the T&L Board of Directors in July and December 2023, which were disregarded,” it adds.
“The resolutions being put forward for the EGM to consider include a request for the 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,” the statement continues.
“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 statement says.
“While we are grateful for the efforts of the independent advisory council in addressing some of the looming challenges facing T&L, we are deeply concerned about the future stability of the Company under its current leadership and with the current constitution of the Board,” it adds.
A change in leadership would mean the ouster of Byju Raveendran, who’d founded the company over a decade ago, and lent it his name. After the resignation of three board members last year, Byju’s board is currently a family affair, and consists of Byju Raveendran, his wife Divya Gokulnath, and his brother Riju Raveendran. A change in leadership could mean the removal of the original founders, and the installing of professional leadership in their place.
And Byju’s wouldn’t be the first company to have its founder be ousted by its investors. Apple, famously, had ousted Steve Jobs before he made a return to the firm, and Uber’s investors had similarly ousted CEO Travis Kalanick. In India, Rahul Yadav had been removed from Housing.com, and more recently, Ashneer Grover had been removed from BharatPe. It remains to be seen how Byju’s situation plays out, but its investors are clearly displeased at the company having lost 99 percent of its value in two years, and seem to want a different person at the helm.