Major shareholders of Byju’s, including Prosus NV and Peak XV Partners, voted on Friday to remove its founder as CEO, intensifying a battle over the future of the once-prominent online tutoring startup struggling to stay afloat. Byju’s rejected the resolutions, which also aimed to oust Byju Raveendran from the company’s board, as stated in a Friday release.
“The resolutions passed during the recent extraordinary general meeting, attended by a limited group of shareholders, are deemed invalid and ineffective,” the statement read. A Prosus spokesperson declined to comment, and Peak did not respond immediately to a request for comment.
The vote signals further dissatisfaction with the previously lauded entrepreneur, who abstained from the meeting. This development adds a surprising turn to the ongoing dispute between the company, formerly valued among India’s top startups, and influential investors who supported its growth before the pandemic.
The shareholders’ decision followed a chaotic, hours-long Zoom call involving investors and management on Friday, which some Byju’s employees attempted to disrupt, according to two attendees. Throughout the meeting, unidentified participants intermittently disturbed proceedings with whistles and other loud noises, said the sources, who requested anonymity to discuss a private call.
Byju’s and its creditors have been embroiled in a protracted restructuring conflict since the company defaulted on a $1.2 billion loan, leading to a subsidiary’s bankruptcy filing in the US.
Raveendran, once celebrated for his rise from tutor to leading a company valued at $22 billion, is resorting to increasingly desperate measures to sustain the business after rapid expansion during the pandemic left it unprepared for declining online tutoring demand post-school reopenings.
Amid resignations from board members, Raveendran has pledged his and his family’s homes to secure funds for employee salaries. Additionally, Byju’s is offering new stock at a discount exceeding 90% from its prior funding round to raise capital.
Raveendran’s firm is among several once-praised tech startups grappling with financial or legal challenges. Paytm, renowned for revolutionizing online finance in India, faces difficulties following the central bank’s sudden suspension of a key division.
