A group of major investors in Byju’s has called an extraordinary general meeting seeking a change in leadership in Byju’s days after the edtech group launched a $25 million rights issue at a pre-fund valuation.
The investor association said it called the EGM after “several months of sustained efforts” to address “ongoing issues” at Byju’s, which at the time of its last fundraising in 2022, was the world’s most valuable edtech. It initially issued the request for an extraordinary general meeting in December.
“The decisions put before the extraordinary general meeting for consideration include a request to resolve governance, financial mismanagement and compliance issues; a restructuring of the board of directors, so that it is no longer under the control of T&L’s founders; and a change in the company’s leadership,” a consortium of investors said in a statement on Thursday.
“The issuance of this EGM notice follows several months of sustained efforts by shareholders to engage with the Company to address ongoing issues relating to corporate governance, mismanagement and compliance. These efforts have continued following the resignation of directors nominated by Prosus and other shareholders from the Board in June 2023 .
Prosus, General Atlantic, Peak XV, the Chan Zuckerberg Initiative, Owl and Sofina are among those requesting to hold an EGM, a source with direct knowledge of the situation told TechCrunch.
The move comes on the heels of Byju’s, India’s most valuable startup, lowering its valuation demand by 99% in a rights issue it launched earlier this week to meet its liabilities and operating costs. The startup said it was looking to raise $200 million in a rights issue, capital it said was “essential to prevent any further decline in value.”
The startup, once India’s most valuable startup, has revalued at $25 million as a pre-money valuation in a rights issue. Byju’s has raised more than $5 billion in debt and equity.
Full statement:
As investors with a proven track record of supporting the Indian startup sector over many years, we are deeply committed to serving the long-term interests of the companies we invest in and their stakeholders.
From this standpoint, and in accordance with the rights granted to shareholders under the Companies Law of 2013, notice has been issued: [today] Issued to the shareholders of Think & Learn Private Limited (T&L) to request an Extraordinary General Meeting (EGM) to address ongoing issues. The request to hold an extraordinary general meeting is supported by the T&L Shareholders’ Union and follows previous notices of request sent to the T&L Board of Directors in July and December 2023, which were ignored.
The resolutions submitted to the Extraordinary General Assembly for consideration include a request to resolve governance, financial mismanagement and compliance issues; Reconstitution of the Board of Directors, so that it is no longer controlled by the T&L founders; A change in company leadership.
The issuance of this EGM notice follows several months of sustained efforts by shareholders to engage with the company to address ongoing issues relating to corporate governance, mismanagement and compliance. These efforts continued after directors nominated by Prosus and other shareholders resigned from the board in June 2023.
While we are grateful for the efforts of the Independent Advisory Board 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 Board constitution.
We strongly believe in India and the transformative role that education technology can play in improving teaching and learning. We also continue to believe in BYJU’s role and contribution. As shareholders, we will continue to assert our rights, in cooperation with other shareholders and government authorities, to protect the long-term interests of the company and its stakeholders.
More to follow.