Beleaguered edtech firm Byju's, whose major investors called for an extraordinary general meeting seeking changes in leadership, said Friday its investors do not have the rights to vote for management change.
Taking the feud public, the edtech firm led by founder and CEO Byju Raveendran said in a statement the actions of the investors were "disruptive" at a "highly challenging time".
The development comes a day after some of Byju’s major investors including tech investor Prosus said they were concerned about the company’s future stability due to “governance, financial mismanagement and compliance issues”. The consortium called for the reconstitution of the board of directors of Think and Learn Pvt. Ltd, the company that runs Byju’s.
This isn’t the first instance of a tussle between the company and its investors. Last year, three board members–GV Ravishankar, Russell Dreisenstock and Vivian Wu–from key investors Peak XV Partners, the Chan-Zuckerberg Initiative and Prosus resigned from the board. These actions, Byju’s said, triggered a “broader crisis”.
Byju’s has been struggling to raise fresh capital and repay its debts while it battles lawsuits and numerous other challenges. The company has also laid off thousands of employees in multiple rounds since 2022 amid the liquidity crunch.
Earlier this week, Byju’s launched a rights issue to raise $200 million from its existing equity investors to clear its immediate liabilities and meet operational requirements, taking a major valuation bump. Byju’s launched the rights issue at a 99% valuation cut from its peak valuation of $22 billion as it takes steps to clear its mounting obligations.
Byju’s said it has received encouraging responses from multiple investors for the issue. “We want to re-emphasize that the company has not had any external investor funding for nearly two years apart from the founder infusing over $1 billion — a reason why it launched a rights issue as a quick and equitable way to raise money,” the company said.
