Bengaluru – Byju’s, the global leader in education technology (Edtech), is currently grappling with significant challenges that require immediate attention to protect its stakeholders. Rising concerns are focused on the potential impact of these challenges on students, trainers, educators, and employees who rely on the platform.
The actions and declining stake of Byju’s founders have come under scrutiny. According to PrivateCircle Research, the founders’ total stake has decreased from 71.6 percent in 2015-16 to 21.2 percent in 2023, raising questions about their confidence in the company’s future. Secondary sales of up to $400 million by the promoters have further raised doubts about their commitment.
Corporate governance issues have also surfaced, with resignations of auditors and independent directors from the board. These departures have sparked concerns about governance practices within the company. Additionally, both the Ministry of Corporate Affairs and the Serious Fraud Investigation Office (SFIO) have initiated investigations into Byju’s, while the Enforcement Directorate (ED) is looking into allegations of money laundering. These regulatory challenges highlight potential shortcomings in corporate governance.
Byju’s valuation and acquisition strategies have attracted attention as well. The company’s high valuation has been fueled by promoters purchasing their own stock and acquiring companies at inflated prices. Acquisitions, including that of Whitehat Jr, have raised doubts about the sustainability of Byju’s business model. Moreover, the company’s debt situation has raised concerns about its financial stability.
Industry experts and stakeholders are urging immediate intervention to address the challenges faced by Byju’s. They suggest holding the promoters accountable and appointing a new board with experienced professionals to guide the company. Drawing from successful precedents, such as BharatPe and Satyam Computers, where new boards and management teams were installed, a similar approach may be necessary for Byju’s.
The situation at Byju’s necessitates attention from investors, the government, and the board. Swift action and intervention are crucial to navigate the challenges, protect stakeholders’ interests, and ensure the long-term viability of Byju’s operations in the dynamic Edtech landscape.
