Education technology giant BYJU’s is under pressure for the removal of its founder and group CEO Byju Raveendran from his responsibilities.
Six key investors in Think and Learn Pvt. Ltd, the parent company of edtech giant BYJU’s, have initiated a call for an extraordinary general meeting (EGM) to tackle various issues plaguing the organization.
Led by Dutch investment firm Prosus, these investors aim to address concerns related to governance, financial mismanagement, and compliance, seeking the removal of founders from controlling the firm.
The investors, including General Atlantic, Peak XV, Sofina, Chan Zuckerberg, Owl, and Sands, jointly holding a substantial 30 percent stake in BYJU’s, have submitted a notice for the EGM, media reports aid.
The proposed resolutions include the resolution of governance, financial, and compliance issues, reconstitution of the Board of Directors to eliminate founder control, and a change in the company’s leadership.
Prosus website in its letter on February 1 publicly demanded the removal of the founders of BYJU’s. The letter did not name the founder/s.
“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,” Prosus said in a news statement.
The digital education platform says founder of BYJU’s is Byju Raveendran. BYJU’S was founded in 2011 as Think and Learn Pvt. Ltd by teacher and engineer Byju Raveendran. Based in Bangalore, India, with offices in Palo Alto, CA, the company grew into one of the world’s largest ed-tech companies and one of the top 5 most-valued private internet companies in India.
Tiger Global, Naspers Ventures, CPPIB, private equity firm General Atlantic, Chan-Zuckerberg Initiative, Tencent, Sequoia Capital, Lightspeed Venture Partners, Sofina, Verlinvest, Owl Ventures, and India-based Times Internet are some of the main investors of BYJU’s.
Despite earlier attempts by a consortium of BYJU’s shareholders in July and December to convene a board meeting for similar purposes, those requests were disregarded by the online education company.
In response to these developments, BYJU’s issued a news statement asserting that investors do not possess voting rights on CEO changes.
Think & Learn, undeterred by the investor dissent, announced its commitment to proceed with the proposed $200 million rights issue after receiving positive responses from multiple investors.
In a separate communication to its employees, BYJU’s accused certain investors of conspiring against the company during a challenging period. The company defended its founder, stating, the founders are the largest investors and the greatest fighters for Byju’s. The management has expressed disappointment at investors choosing media channels instead of direct communication during this crisis.
The letter also addressed a slight delay in salary disbursements for January, attributing it to the crisis induced by select investors. BYJU’s assured employees that salaries would be paid in a phased manner starting February 2, with the process set to conclude by February 5. The company highlighted Byju Ravindran’s personal commitment to ensuring employee financial security, including pledging his home in previous months.
Notably, BYJU’s reportedly delayed January salaries amid the financial challenges faced by its Alpha unit in the US, which filed for Chapter 11 bankruptcy proceedings, listing liabilities ranging from $1 billion to $10 billion, in the US court of Delaware.