Trouble mounts at Byju’s as 3 directors quit
GV Ravishankar of Sequoia Capital, Vivian Wu of Chan Zuckerberg Initiative, and Russell Dreisenstock of Prosus have resigned from board owing to differences with the founder Byju Raveendran, say sources
Byju's likely to miss March 10 salary deadline for 20,000 employees as funds remain stuck
Bengaluru Edtech major Byju’s trouble seems to be mounting as sources in the know said that three directors of the company have resigned from its board owing to differences with the Founder, Byju Raveendran.
Though Byju’s dismissed reports of any such resignation, terming it as entirely speculative, multiple people and reports suggested that three directors GV Ravishankar of Sequoia Capital (now Peak XV Partners), Vivian Wu of Chan Zuckerberg Initiative, and Russell Dreisenstock of Prosus have resigned from the board.
This development has come at a time when Byju’s is in fight with its lenders over lending terms. The company had filed a case against one of its lenders in the New York Supreme Court recently challenging the acceleration of the term loan B it raised in November 2021. Byju’s also skipped paying $40 million in interest that was due on June 5 as the tiff between lenders and the company grew.
This development may also work as a dampener for Byju’s plans to list its subsidiary Aakash Educational Services by mid-2024. The board of Byju’s had already approved this plan of the company, which if goes through will provide some financial flexibility to the edtech major.
Byju’s has been in news for all the wrong reasons post the pandemic as it has undertaken massive firing of its employees to cut cost and improve its runway amid funding winter.
Reports suggested that more than 2,000 people lost their jobs at Byju’s owing to such cost optimisation measures. The company recently raised $700 million at a flat valuation of $22 billion from a clutch of investors. However, sources in the know said the edtech major is facing trouble in maintaining the valuation levels as some of its bets have gone wrong. The company is also struggling to make some of its big investments work apart from accusations of mis sellingof its products to parents and students.
Currently, the company is in discussions with its lenders as it is seeking easier terms on the loan in its bid to save cost and achieve profitability.
Byju’s is the world’s most valued edtech major apart being the most valued unicorn in Indian startup ecosystem. However, its fortune has taken a turn post pandemic when all edtech majors saw their subscription dwindling with students going back to offline classrooms. The company since then has adopted an omnichannel approach to education with its big ticket buy of Aakash.
