Byju Raveendran wants to keep his investors happy in the midst of turmoil at Byju’s.
Founder and CEO of embattled edtech group Byju’s, Byju Raveendran, has devised a last-ditch attempt to assuage the concerns of his Indian startup’s dissatisfied investors.
In an email to shareholders on Friday, which was obtained by TechCrunch, Raveendran disclosed that the startup’s board is contemplating an offer of relinquished shares to prevent the dilution of their holdings. This comes ahead of the approval of a recent rights issue, which has drastically reduced the company’s valuation by 99%.
The email also addressed the animosity displayed by some investors, who have resorted to unwarranted legal actions. Raveendran informed shareholders that Byju’s has already received more than 50% of the required votes to increase the authorized share capital and implement the $200 million rights issue. The resolution is set to be passed during an extraordinary general meeting on Friday. However, the rights issue values Byju’s at less than $250 million, a significant drop from its previous valuation of $22 billion in early 2022.
Notable investors such as Prosus Ventures, Peak XV Partners, and Chan Zuckerberg Initiative chose not to participate in the recent rights issue. Instead, they have sought legal means to remove Raveendran and his family from the startup and invalidate the rights issue.
Raveendran defended his actions in the email, stating that his vision has always been to achieve equality and equity, regardless of shareholding size. The founder expressed his belief that together, the company and its investors can overcome any challenges.
Prosus Ventures, Peak XV Partners, and Chan Zuckerberg Initiative have also raised concerns about governance practices at Byju’s. The company has also faced criticism for its delayed financial accounts. As a result, these investors have resigned from the board, and Deloitte, a global auditing giant, terminated its account with Byju’s last year.
Raveendran concluded the email by acknowledging that he has given his all for the success of Byju’s and hopes that investors will see the value in continuing on the company’s journey together.
This is an ongoing story, and more developments are expected to follow.
