“Byju’s CEO Under Pressure as Investors Commit ₹2,500 Crore to Edtech Firm”
Byju’s, the prominent edtech firm, finds itself embroiled in a tumultuous period as CEO Raveendran faces the looming prospect of ouster amidst a flurry of financial woes and investor dissatisfaction. Despite the challenges, the company has garnered a significant commitment of ₹2,500 crore (approximately $300 million) from investors for an upcoming rights issue, aimed at stabilizing its precarious financial situation.
Byju’s, the prominent edtech firm, finds itself embroiled in a tumultuous period as CEO Raveendran faces the looming prospect of ouster amidst a flurry of financial woes and investor dissatisfaction. Despite the challenges, the company has garnered a significant commitment of ₹2,500 crore (approximately $300 million) from investors for an upcoming rights issue, aimed at stabilizing its precarious financial situation.
The rights issue, initiated by Byju’s in January, seeks to raise $200 million through an equity rights offering. However, the enterprise valuation of the parent company, Think and Learn, has plummeted by over 90 percent from its peak, now ranging between $220-250 million. This substantial devaluation starkly contrasts with the company’s zenith in March 2022, when it achieved a valuation of $22 billion during the Covid-19 pandemic.
In an effort to assuage lenders and disgruntled investors, Byju’s has offered additional measures to enhance transparency within the organization. Among these measures is the provision for appointing two independent directors, albeit pending completion of the rights issue and declaration of the 2023 financial results.
Despite the infusion of funds, investor discontent has reached a boiling point, culminating in a push for the removal of Byju’s founders from their leadership positions. Notably, a consortium of investors, including General Atlantic, Peak XV, Sofina, Chan Zuckerberg, Owl, and Sands, collectively holding around 30 percent stake in the company, has called for a special Extraordinary General Meeting (EGM) to vote on the ouster of the founders – Byju Raveendran, Divya Gokulnath, and Riju Raveendran.
The shareholders seek to replace the existing leadership with new appointees in top positions, citing alleged mismanagement and lack of transparency. This move underscores the depth of investor dissatisfaction and the urgency for significant changes within the company.
While such internal turmoil threatens to disrupt Byju’s operations, it also highlights the challenges faced by prominent players in the burgeoning edtech sector. The outcome of the impending EGM and the success of the rights issue will undoubtedly shape the future trajectory of Byju’s and its role in the evolving landscape of digital education.
Sources By Agencies
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