Nearly a month after launching the $200 million rights issue and a couple of days before an extraordinary general meeting (EGM), BYJU’S Founder and CEO, Byju Raveendran, has said that the edtech firm’s rights issue is fully subscribed and the company will appoint a third-party agency to monitor fund usage.
“Our rights issue is fully subscribed and my gratitude to my shareholders remains strong. But my benchmark of success is the participation of all shareholders in the rights issue,” Raveendran said in a letter to its shareholders, which was seen by YourStory.
The rights issue, at a 99% lower valuation, is a much-needed lifeline for the cash-strapped edtech firm, providing BYJU’S with capital to address pressing liabilities.
“To ensure transparency with regard to the usage of funds raised through the rights issue, we will appoint a third-party agency to monitor the same. This agency will report to all shareholders on a quarterly basis, within 45 days from the end of the quarter, along with commentary from the board,” Raveendran wrote in the letter.
The current board comprises Raveendran, his wife and co-founder Divya Gokulnath, and his brother Riju Raveendran. Peak XV Partners’ GV Ravishankar, Prosus’s Russell Dreisenstock, and Chan Zuckerberg’s Vivian Wu officially stepped down from the edtech firm’s board in June last year.
Raveendran said he plans to restructure the board after closing the audit of the financial year 2022-23.
“In order to increase shareholder representation, I commit to restructuring the board and appointing two non-executive directors to the board by the mutual consent of the founder and shareholders, right after the FY23 audit, which we expect to close by the end of this quarter. I believe this will be in the best interest of the company and allow for greater engagement with shareholders,” the BYJU’S chief noted.
Earlier this month, several major investors in BYJU’S issued a notice to Think and Learn Private Limited—the parent company of the edtech firm—requesting an EGM to address persistent issues.
In a statement, the group of investors said they are “deeply concerned about the future stability of the company under its current leadership and with the current constitution of the board”.
Later, Think and Learn asserted that the shareholder’s agreement does not grant investors the right to vote on CEO or management changes. Its management also alleged that certain investors are conspiring and demanding a change in the company’s leadership.
“Despite these headwinds we face as a company, there are tangible indicators of our enduring brand strength and future potential,” Raveendran said in his letter to shareholders, claiming growth in traffic on BYJU’S website and apps despite reduced marketing spends in recent times.
Edited by Swetha Kannan
