Peak XV Partners' GV Ravishankar, Prosus' Russel Dreisenstock officially step down from Byju's board

Byju-Raveendran

Board members of Byju's GV Ravishankar of Peak XV Partners (Sequoia Capital India) and Russel Dreisenstock have officially stepped down from the board of Byju's, in the biggest setback for the world's most valued edtech which is currently in a tiff with its lenders.

This comes a day after Moneycontrol reported that three board members of Byju's - G V Ravishankar of Sequoia Capital (now Peak XV Partners), Vivian Wu of Chan Zuckerberg Initiative, and Russell Dreisenstock of Prosus have tendered their resignations owing to differences with founder Byju Raveendran on key operational issues.

Chan Zuckerberg also confirmed the development.

"We confirm that Vivian Wu of the Chan Zuckerberg Initiative has resigned from the board of Think & Learn Pvt Ltd,” a spokesperson for Chan Zuckerberg said.

Statements confirming the two board members' resignation also come a day after Byju's denied the development, calling it speculative.

However, in a late evening statement on June 23, the company said, "The management has been engaging with investors in constructive discussions on the reconstitution of the board at Byju's, including the induction of independent directors. The need for reconstitution arose as few investors had to vacate the board seat due to their shareholding falling below a minimum required threshold as per our shareholder agreement."

"We want to reassure all stakeholders that we are actively working towards constituting a diverse and world-class board commensurate with the company’s size and scale," the company added.

In a statement, a spokesperson of Peak XV Partners said, "We confirm that GV Ravishankar, MD, Peak XV Partners has resigned from the board of Think & Learn Pvt Ltd. We are committed to supporting the company for bringing on board an independent director in order to strengthen business processes and internal control mechanisms.”

The statement from Prosus also confirmed the exit of its representative Russell Dreisenstock and added that the company is required to file the resignation letter with the MCA in India within the required time period.

“Prosus confirms that Russell Dreisenstock, the representing Board Director from MIH Edtech Investments, B.V. (a Prosus entity) on the board of Think & Learn Private Limited, resigned from his position. The Company is required to file the resignation letter with the MCA in India within the required time period,” the statement read.

Adding to mounting troubles for the world's most valued edtech company, Deloitte - its statutory auditor, tendered its resignation with immediate effect.

Byju's appointed BDO (MSKA & Associates) as Deloitte's replacement and as the company's statutory auditors for the year commencing from FY22 for the next five years. BDO will also be the statutory auditor of the consolidated group and will audit IPO-bound Aakash Educational Services.

Also Read: Byju’s CFO was tasked with changing auditor amid deteriorating ties with Deloitte, sources say

The board members' departure also comes at a time when Byju's is looking to take Aakash Educational Services, its most-successful acquisition to date, public by mid-2024. The board of Byju's had formally approved the Aakash IPO in early June.

Earlier this month, Byju’s said that it had filed a case against one of its lenders in the New York Supreme Court challenging the acceleration of the term loan B it raised in November 2021. Byju’s also skipped paying $40 million in interest that was due on June 5, technically defaulting on the loan.

To be sure, Byju’s has been engaging in discussions with its lenders since December last year when the company sought easier terms on the loan as it was looking to save costs with an aim to achieve profitability.

But the company’s lenders asked for quicker part payment of the $1.2 billion loan after Byju’s failed to meet certain conditions, including a September 2022 deadline for filing its results for the year ended March 31, 2022, Bloomberg News reported. Earlier this month, the lenders scrapped these negotiation talks after filing a case against the company in the Delaware court.

Byju's soared to new highs in March last year, when it raised a massive $800 million round at a $22 billion valuation. But since then, the company has come under fire for a number of reasons including accounting irregularities, tussle with lenders, mass layoffs and mounting losses.

Byju's has raised $250 million at the same $22 billion valuation since then, and is in talks to raise $700 million more at the same valuation.

Byju's offices in Bengaluru were also searched by India's financial probe agency Enforcement Directorate in April under provisions of the Foreign Exchange Management Act. The company is yet to file audited results for FY22 (2021-22).

For FY21 (2020-21), Byju's reported a huge jump in losses to more than Rs 4,500 crore, while its revenue dropped marginally, a surprise since FY21 was the first year of Covid that gave online learning companies a shot in the arm.

Founded over a decade ago by former teacher Byju Raveendran, Byju’s has raised over $5 billion, most of it in the past five years.