Veteran investor Kanwal Rekhi on Byju's: 'Auditors' resignation typically means...'

Kanwal Rekhi also compared Byju's to Icarus -- a character in Greek mythology.

As problems surrounding Byju's multiply, including the resignation of its auditor due to the delay in financial statements, veteran investor Kanwal Rekhi commented on the edtech startup's rapid rise and then -- what appears to be -- its decline.

The Indian-American businessman compared Byju's to Icarus -- a character in Greek mythology who learned how to fly by attaching wings to his body using wax, but soared too high, despite warnings, and eventually fell to his death after flying too close to the sun.

"Byju's story reminds me of Icarus the bird that got too close to the sun. It forgot it had wings joined with the body with wax that melted because of the heat of the sun," Kanwal Rekhi wrote on LinkedIn. He added that the resignation of the startup's auditor Peak XV Partners (earlier known as Sequoia Capital India) implied that there was some wrongdoing involved and that people were trying to protect themselves by disassociating themselves from Byju's.

"Auditors' resignation typically implies numerical malfeasance. Board members leaving en-masse also typically means people trying to protect their reputation. I have no idea what the actual situation at Byju is but all this does not bode well," Rekhi said.

The resignations are among the biggest crises for Byju's, valued last year at $22 billion and backed by the likes of investor General Atlantic.

"I worry about Peak XV-nee Sequoia here too. They have been close too many of the troubled situations. Indian startup ecosystem needs to clean up its act. This process should squeeze out all the silliness that had engulfed the sector," Rekhi added.

Read more: Byju’s courts trouble with EPFO over delay in PF payments