Shareholders Demand Change in Management at Byju’s

A group of major shareholders at Think and Learn Pvt. Ltd., the parent company of edtech startup Byju’s, have called for a change in the company’s management. They are specifically demanding the removal of co-founder and CEO Byju Raveendran, according to sources familiar with the matter.

The shareholders, including General Atlantic, Prosus Ventures, Peak XV, Chan Zuckerberg Initiative, and others, have issued a notice to conduct an extraordinary general meeting (EGM). The purpose of the EGM is to propose a reconstitution of the company’s board, in addition to the change in leadership.

This notice comes after the company failed to act on a previous EGM requisition notice sent in July and December. The group of investors believes that the change in management is necessary to address governance, financial mismanagement, and compliance issues within the company.

Byju’s, once valued at $22 billion and considered India’s most valuable startup, has faced a decline in recent times. The company has struggled with increasing liabilities owed to vendors and employees as more students returned to in-person learning.

The shareholders have been attempting to engage with the company’s management for several months to resolve these issues, but with no success. As a result, they have taken the step of issuing the EGM notice in the best interest of the company and its shareholders.

In the meantime, Byju’s recently launched a rights issue to raise $200 million from existing shareholders. The funds will be used to address the company’s mounting liabilities, which are estimated to be around $125-$150 million.

If the shareholders’ demands for change in management are not met, those who do not participate in the rights issue may face a significant erosion of their shareholding.

Byju’s has been facing multiple challenges over the past year, including legal disputes with bondholders and difficulties in filing financial results. The company has been trying to negotiate with bondholders while also considering selling some of its assets.

Last month, Byju’s released its consolidated financials, which showed a surge in losses but an increase in income compared to the previous year. However, the company’s financial situation remains a concern.