After months of behind-the-scenes conflict, Byzoos and some of its biggest investors are now publicly airing their grievances against each other.
Byjus, once India's most valuable startup, said on Friday that its investors no longer have the right to vote to seek leadership changes, a day after a group of shareholders called an extraordinary general meeting to remove founder Byju Ravindran and his family from top roles. edtech group.
In a press release, Byjus said it will continue its discussions to raise $200 million in a rights issue, which has received “encouraging responses from multiple investors.”
Baiju's leadership specifically informed employees earlier Friday that the ongoing rights issue had already secured commitments for “more than 100 percent of the proposed amount.” They accused investors of “seeing a crisis” as an “opportunity to plot” and demanded Ravindran's removal.
Leadership at Baijus also said there was a “slight delay” in January payroll due to an “artificially induced crisis” by select investors.
The investors, including Prosys, General Atlantic, Peak XV, the Chan Zuckerberg Initiative, said in a statement Thursday that they “seek resolution of outstanding governance, financial abuse and compliance issues; restructuring of the Board of Directors so that it is no longer controlled by T&L's founders; and a change in company leadership.”
This is the third time investors have sought an EGM. The new request comes after Baiju launched a rights issue to raise capital needed for its survival. The Bengaluru-headquartered startup, which was once valued at $22 billion and raised more than $5 billion, reset its valuation to $25 million in a rights issue, TechCrunch previously reported.
Baiju's full Friday announcement:
Think & Learn Pvt Ltd, the parent company of BYJU, has noted with regret the announcements from select few investors calling for an Extraordinary General Meeting (EGM) in place of Founder and Group CEO Byju Ravindran. Under these unfortunate circumstances, we emphasize that the shareholders' agreement does not give them the right to vote on a CEO or management change.
TLPL will proceed with a proposed $200 million rights issue after receiving encouraging responses from multiple investors. The company is delighted with the support it has received from a wide cross section of its stakeholders
The complexity of the rights issue is shared with all stakeholders, with capital critical to a successful turnaround. Unfortunately, the company and our employees are paying the price for the stand-off induced by some investors. Business continuity is essential, and we prioritize this in our actions.
Baiju Ravindran and his leadership team continued TLPL after a wider crisis hit, with three investors stepping down from the company's board last year. The company, along with an advisory board consisting of Rajneesh Kumar and Mohandas Pai, has formed a working group with investors to find a constructive way forward.
The company and its leadership updated the working group on all key matters, including the ongoing business restructuring, financial condition and audits. TLPL is turning the business around, reducing monthly burn to near operational breakeven and working on an AI-led technology refresh soon. On occasion, the actions of a few anonymous investors can be disruptive at the most challenging times.
TLPL remains on the conversational path even as founders and leadership find ways to meet the company's mounting obligations, including salary payments. We would like to re-emphasize that the company has not had any external investor funding for nearly two years, with the founder infusing over $1 billion – the reason for launching a rights issue as a quick and equitable way to raise money.