Board members of the leading Indian education tech startup Byju group- GV Ravishankar of Peak XV Partners (Sequoia Capital India) and Russel Dreisenstock have officially stepped down from the board of Byju’s, in the biggest drawback for the world’s most profitable edtech which is recently at loggerheads with its lenders.
This comes soon after Moneycontrol notified that three board members of Byju’s – G V Ravishankar of Sequoia Capital (now Peak XV Partners), Vivian Wu of Chan Zuckerberg Initiative, and Russell Dreisenstock of Prosus have tendered their resignations owing to differences with founder Byju Raveendran on important operational issues.
The report was also confirmed by Chan Zuckerberg.
A spokesperson for Chan Zuckerberg said, “We confirm that Vivian Wu of the Chan Zuckerberg Initiative has resigned from the board of Think & Learn Pvt Ltd.”
Reports seconding the resignation of two board members have also come a day post Byju’s denial of the development, calling it speculative.
However, in a late evening statement on June 23, the company said, “The management has been engaging with investors in constructive discussions on the reconstitution of the board at Byju’s, including the induction of independent directors. The need for reconstitution arose as few investors had to vacate the board seat due to their shareholding falling below a minimum required threshold as per our shareholder agreement.”
“We want to reassure all stakeholders that we are actively working towards constituting a diverse and world-class board commensurate with the company’s size and scale,” the company added.
The statement from Prosus also seconded the resignation of its representative Russell Dreisenstock and added that the company needs to file the resignation letter with the MCA in India within the given time period.
The Financial Express
The statement read, “Prosus confirms that Russell Dreisenstock, the representing Board Director from MIH Edtech Investments, B.V. (a Prosus entity) on the board of Think & Learn Private Limited, resigned from his position. The Company is required to file the resignation letter with the MCA in India within the required time period.”
Increasing the mounting troubles for the world’s most valued edtech company, Deloitte – its statutory auditor, tendered it immediately.
The exit of the board members comes at a time after its acquisition of Aakash Educational Services, its most-successful till date, public by mid-2024. The board of Byju’s had officially approved the Aakash IPO in early June. Recently, Byju’s said that it had registered a case against one of its lenders in the New York Supreme Court challenging the increase of the term loan B it borrowed in November 2021. Byju’s also skipped paying $40 million in interest that was due on June 5, technically defaulting on the loan.
Since December last year, Byju’s has been in discussions with its lenders when the company sought easier terms on the loan as it was looking to save costs with an aim to achieve profitability.
According to a report by the Bloomberg News, the company’s lenders demanded for early part payment of the $1.2 billion loan after Byju’s couldn’t meet certain conditions, along with the September 2022 deadline for filing its results for the year ended March 31, 2022.
In April, the Ed tech giant’s offices in Bengaluru were also searched by India’s financial probe watchdog Enforcement Directorate under provisions of the Foreign Exchange Management Act. The company has still not filed audited results for FY22 (2021-22).
For FY21 (2020-21), it reported reported a steep jump in losses of over Rs 4,500 crore, whereas its revenue declined drastically, which was quite astonishing as FY21 was the first year of Covid that gave online learning companies a boost in revenue.
The Ed tech startup was founded more than a decade ago by former teacher Byju Raveendran, and since then, it has raised more than $5 billion, majority in the last half decade.
