‘Finally someone smelt…’: upGrad founder Ronnie Screwvala reacts as call for ouster of Byju Raveendran amplifies
Ed-tech platform upGrad co-founder Ronnie Screwvala has reacted to a LiveMint report that shareholders of Byju’s are seeking to oust the company’s founders, including Byju Raveendran.
“Finally someone smelt the coffee”, Screwvala wrote on the X platform. He hoped that the shareholders would stay the course and get it done for “India as an investment destination” and for the credibility of the “otherwise sunrise and sunshine sector”.
Livemint on Thursday reported that a group of shareholders of beleaguered ed-tech startup Byju’s have called for a change in the company’s management, including the removal of co-founder and chief executive Byju Raveendran.
General Atlantic, Prosus Ventures, Peak XV, and Chan Zuckerberg Initiative, among others, signed a notice, calling for an extraordinary general meeting (EGM) to also propose a reconstitution of the company’s board.
Byju’s value drop: Foreign investors have an odd objection
The investor consortium said that they were issuing EGM notices in the interest of the company and its shareholders.
“We are deeply concerned about the future stability of the company under its current leadership and with the current constitution of the Board,” the shareholders said in a statement.
The investors are requesting a meeting to resolve “outstanding governance, financial mismanagement, and compliance issues; the reconstitution of the Board of Directors, so that it is no longer controlled by the founders … and a change in leadership of the company,” it added.
Rights issue caps Byju’s wild ride from top startup to throwaway valuation
Byju’s was one of India’s hottest startups, valued at $22 billion in 2022 due to a surge in remote learning during the Covid-19 pandemic.
However, Byju’s recently declared its financial results after a delay of about 22 months in which it reported a widening of operational loss to ₹6,679 crore in FY22, mainly due to losses incurred by subsidiaries White Hat Jr and Osmo.
The company has posted an operational loss (EBITDA) of ₹4,143 crore in FY 2021, according to its regulatory filing.
‘My head is bloody, but unbowed’: Byju’s Raveendran writes to shareholders
The company’s net losses increased to ₹8,245 crore in FY22 from ₹4,564 crore in FY21. Recently, BlackRock, the world’s largest asset manager, slashed the implied valuation of Byju’s to about $1 billion from $22 billion.
Deloitte resigned as auditor of Byju’s after the ed-tech company delayed financial statements for the year ending March 31, 2022.
Board members representing Peak XV, Prosus, and Chan Zuckerberg Initiative also stepped down from Byju’s board last year.
The company is also facing a US lawsuit disputing terms and payment of a loan.
Meanwhile, Byju’s is reportedly looking to raise $200 million through equity rights issue at an enterprise valuation in the range of $220-250 million.
“The board of Think and Learn Private Limited (TLPL) today launched the raising of funds $200 million by way of a rights issue to all its equity shareholders to support its ongoing efforts to drive growth and achieve operational sustainability,” the company said in a statement.
The company said that the proposed rights issuance by TLPL aims to fund the ongoing capital expenditure and support general corporate purposes.
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Published: 01 Feb 2024, 06:58 PM IST
Ganesh
http://ganesh@finplay.inFinance enthusiast, Mutual fund expert.