Byju Raveendran, the founder of embattling edtech group Byju’s, has made a last-ditch attempt to placate disgruntled investors, informing them that the board is weighing an offer of renounced shares to prevent dilution of their holdings ahead of validating a recent rights issue that cuts the Indian startup’s valuation by 99%.
In an email to shareholders Friday morning, a copy of which TechCrunch has reviewed, Raveendran said the startup’s board is considering to make the offer despite the “animosity” displayed by some of the investors who are pursuing “uncalled for legal actions.”
Raveendran also informed the shareholders that the startup has already received over 50% votes required to increase the authorized share capital in the startup to take into effect the fully-subscribed $200 million rights issue. Byju’s is holding an extraordinary general meeting Friday, where it will attempt to pass the resolution over the rights issue. The rights issue values Byju’s under $250 million, a stunning drop from the $22 billion valuation the startup boasted in early 2022.
Prosus Ventures, Peak XV Partners and Chan Zuckerberg Initiative are among the investors who didn’t participate in Byju’s recent $200 million rights issue. The investors have instead sought, using legal means, to remove Raveendran and his family from the startup and to invalidate the rights issue.
“I have always built Byju’s with a spirit of equality and equity, and it has never been my intention to leave any investor behind, regardless of their shareholding size,” Raveendran wrote in Friday email. “From the very inception of this company, my vision has been to take everyone along, from one milestone to another. And it has always been my conviction that we will overcome our challenges together.”
Prosus, Peak XV and Chan Zuckerberg Initiative have expressed concerns about the governance practices at the startup, which has also repeatedly failed to timely produce its financial accounts in recent years. The investors quit the startup’s board whereas the global auditing giant Deloitte dropped the account of Byju’s over these concerns last year.
“Even my critics known that I have invested my everything, and even more, into this company,” Raveendran wrote Friday. “So, I hope that you will see the value in continuing with Byju’s in the same spirit with which you first joined our journey.”
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