Edtech major Byju’s in talks with investors who quit board to reconsider

Byju’s is asking three global investors to reconsider their decision to resign from its board of directors, three sources with direct knowledge of the situation said, as the Indian education technology company grapples with the fallout from the resignation of its auditor.

Board members representing Peak XV Partners, formerly Sequoia Capital India, Prosus and Chan Zuckerberg Initiative, recently resigned without giving a reason, in a setback for Byju’s, which last year was valued at $22 billion.

News of their departure came on June 22, the same day that Deloitte revealed it was resigning because Byju had delayed financial statements for 2021-22 and not filed documents, even after the auditor wrote several letters to the board.

The three sources, who declined to be named because the talks are private, told Reuters that Peugeot’s leadership is in talks with investors to try to persuade them to reverse their decision.

Byju’s and the three investors did not immediately respond to requests for comment on Friday.

The company, often described as one of India’s most successful startups, called reports of the board’s exit “speculation”, saying it would make disclosures when needed.

Byju, which offers online lessons on subjects like math, physics and chemistry to school students, has boomed in popularity during the COVID-19 pandemic.

Its rise has been a boost to India’s startup scene as investors, including General Atlantic, have made big bets on Byju.

Two of the sources said the investors made a unanimous decision to resign from the board of directors because they had not received answers from Byju’s founder and its senior management.

Byju’s and its lenders are involved in legal cases in the United States over the restructuring of a $1.2 billion loan.

In recent months, Byju investors have raised concerns with the company’s leadership regarding audit delays and how it handles cases involving its lenders, one of the sources said.

The departure means Byju’s board now consists solely of its founder and chief executive Byju Raveendran, his wife Divya Gokulnath and his brother Riju Raveendran.

One of the sources added that while the investors are in talks with Byju, it has not yet been decided whether or not their decision to resign will change.

(Reporting by Aditya Kalra; Editing by Alexander Smith)