Byju’s, the Indian education technology company once valued at over $20 billion, is facing a major storm from its own investors. In a dramatic move, a group of major Byju’s shareholders, including Prosus and Peak XV Partners, recently called for a vote to remove the company’s founder and CEO, Byju Raveendran, and his family from the board. This extraordinary general meeting (EGM) saw over 60% of participating shareholders siding with the investors, citing concerns about “poor management and bad decisions” that have led to Byju’s current financial struggles.
The current predicament stems from Byju’s aggressive expansion pre-pandemic, fueled by investor funds and a thriving online education market. However, the post-pandemic return to normalcy saw a sharp decline in demand for online learning, leaving Byju’s with a significant debt burden and difficulty meeting its financial obligations.
These major shareholders, who collectively hold over 32% of Byju’s parent company, are demanding a complete transformation. They are seeking the removal of the current management, a restructuring of the board to remove founder control, and independent audits to investigate the company’s acquisition practices.
Raveendran and his family are contesting the legitimacy of the vote, arguing that the meeting lacked a quorum and the resolutions are non-binding. The Karnataka High Court will deliver its verdict on March 13th, deciding whether the EGM and its resolutions were valid.