Tech giant Prosus said it and other shareholders are looking to sack the billionaire founder of Indian edtech start-up Byju’s as the once high-flying company faces deep financial woes.
Indian media reports said the move had the backing of the Chan Zuckerberg Initiative, a philanthropic venture founded by Facebook boss Mark Zuckerberg and his wife Priscilla Chan.
Byju’s, once one of India's most valuable start-ups, is bleeding money, has seen auditor Deloitte resign over corporate governance issues, and is embroiled in a legal fight with US lenders over a $1.2 billion (R23bn) loan.
The company is being probed by India's financial investigative agency, has laid off thousands of employees, and has seen its $22bn valuation crash by an estimated 90% over the past year.
Prosus said that it had requested an extraordinary general meeting to oust founder Byju Raveendran and appoint a new board, adding it was being backed by other investors.
“We are deeply concerned about the future stability of the company under its current leadership,” it said in a statement last week.
It had sought for months to engage with the firm over “persistent issues relating to corporate governance, mismanagement and compliance”, it added.
Prosus, which owns roughly nine percent of Byjus, did not name other shareholders that backed the move, but Indian media reports said it had the support of US growth equity firm General Atlantic, and prominent edtech venture capital firm Owl Ventures.
Byju’s did not immediately respond to a request for comment from AFP on Friday.
The Covid pandemic was a boon for Byju’s, which saw demand for its online learning solutions explode as millions of locked-down students and anxious parents turned to the company as schools closed down.
It spent hundreds of millions on acquisitions and marketing during these years, anticipating the pandemic-induced growth would continue.
But demand tapered off as students returned to classrooms, leaving Byju’s with a sprawling empire and unsustainable valuations.
Representatives for Prosus and the Chan Zuckerberg Initiative stepped down from Byju’s board in June.