Prosus-led shareholders push for leadership change at Byju's: Report

A coalition of prominent shareholders, led by tech investor Prosus, is ramping up its push to oust the founders of Indian edtech giant Byju's and initiate a leadership overhaul.

The once-celebrated startup, controlled by billionaire Byju Raveendran and valued at $22 billion in 2022, has recently been grappling with a series of setbacks, including the resignations of its auditor Deloitte and key board members.

A lawsuit in the US challenging loan terms and payment has further fuelled the company's struggles.

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Byju's, which has witnessed a downturn in fortunes, marked by mass layoffs and a substantial drop in valuation, is now at the centre of a shareholder revolt.

The concerned shareholders, expressing apprehensions about the future stability of the company, released a statement, demanding a comprehensive resolution to "outstanding governance, financial mismanagement, and compliance issues."

They are advocating for a restructuring of the Board of Directors, aiming to dilute the founders' control, and a change in the company's leadership.

Prosus, holding approximately 9 per cent stake in Byju's, disclosed the statement and asserted that it enjoys support from "a number of major investors," although they refrained from specifying names.

Other backers of this initiative reportedly include Sofina and Peak XV, formerly known as Sequoia Capital India.

The shareholders' concerns gained momentum following the resignation of Byju's auditor Deloitte last year. The departure was triggered by the edtech company's delay in presenting financial statements for the year ending March 31, 2022.

Deloitte expressed frustration, stating that despite numerous letters, essential documents were not provided by the company's board.

Additionally, board members affiliated with Peak XV, Prosus, and Chan Zuckerberg Initiative also stepped down from Byju's board in the same period.

As the tug-of-war intensifies, some of Byju's investors are asserting that the company's valuation has experienced a substantial dip, plummeting to a range between $1 billion and $3 billion.

(With inputs from Reuters)