Byju’s shareholders express concerns about Byju Raveendran : The shareholders of Byju’s declared themselves to be “deeply concerned” about the stability of the business under the current management.
Byju’s shareholders express concerns about Byju Raveendran : Introduction
Byju’s shareholders express concerns about Byju Raveendran : The once-thriving edtech giant, Byju’s, is facing a tumultuous period as shareholders express deep concerns about the company’s future stability under the current leadership. Byju’s, founded and led by billionaire Byju Raveendran, was considered a hot startup just two years ago. However, a series of setbacks, including layoffs and a significant decline in valuation, have prompted shareholders to call for a change in leadership.
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Shareholder concerns
Byju’s shareholders express concerns about Byju Raveendran : Shareholders, including major investors like Prosus Ventures, Sofina, Peak XV, and Chan Zuckerberg Initiative, have voiced their apprehensions about the current trajectory of the company. In a statement released by Prosus Ventures, which holds a 9% stake in Byju’s, the shareholders expressed their deep concerns about the company’s future under the current leadership.
An extraordinary general meeting (EGM) proposal
Byju’s shareholders express concerns about Byju Raveendran : According to a Livemint report, a group of influential shareholders, including General Atlantic, Prosus Ventures, Peak XV, and Chan Zuckerberg Initiative, has called for an extraordinary general meeting to propose a reconstitution of Byju’s board. The aim is to address governance, management, and compliance issues and to ensure that the board is no longer solely controlled by the founders.
The EGM requisition notice was initially sent in July and reiterated in December after the company failed to take action. The shareholders maintain that the meeting is crucial for the company’s and its shareholders’ best interests. The proposed reconstitution of the board is seen as a necessary step to bring about a change in leadership and address the challenges faced by Byju’s.
Financial struggles and resignations
Byju’s shareholders express concerns about Byju Raveendran : Byju’s faced significant challenges in the past year, including the resignation of Deloitte as its auditor. Deloitte cited a lack of necessary documents, even after repeated attempts to communicate with the board. This led to a delay in the financial statements for the year ended March 31, 2022.
Furthermore, board members representing Peak XV, Prosus, and Chan Zuckerberg Initiative stepped down from Byju’s board in the previous year, reflecting growing dissatisfaction among key stakeholders.
Founder’s response and company valuation
Byju’s shareholders express concerns about Byju Raveendran : In response to the turmoil, Byju Raveendran invoked William Ernest Henley’s ‘Invictus’ in a letter to shareholders, expressing resilience in the face of challenges. Raveendran emphasized the need for an expeditious capital raise to provide the company with the resources required to rebuild and scale. The funds raised would be allocated to sustaining business operations, managing obligations, and ensuring the company’s long-term sustainability.
Despite being one of the brightest success stories in the startup ecosystem, Byju’s witnessed a sharp decline in valuation, estimated to be between $1 billion and $3 billion, according to some investors.
Conclusion
Byju’s shareholders express concerns about Byju Raveendran : Byju’s, once a beacon in the edtech industry, is now grappling with internal challenges that have led shareholders to demand a change in leadership. The proposed extraordinary general meeting signifies a pivotal moment for the company, aiming to address governance issues and chart a new course for its future. As Byju’s navigates this period of uncertainty, the outcome of the EGM will determine the next chapter in the company’s journey.
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