In a significant overhaul of its management structure, Think and Learn Pvt Ltd, the parent company of the prominent Indian edtech firm Byju’s, declared on Monday that its Founder and Group CEO Byju Raveendran will be taking a more pronounced role in the daily operations of the company. Concurrently, the company disclosed the departure of Byju’s India CEO Arjun Mohan, who will transition to an external advisory capacity where he will use his substantial edtech experience to assist the company and its founders during this period of transformation.
Amid an urgent need for funding, Byju’s is wrestling with severe financial losses, a spate of legal actions, and extensive investor dissatisfaction. The company has seen a drop in its valuation to below the $1 billion mark, which equates to approximately Rs 8,300 crore. In light of these struggles, there has been a push from certain investors advocating for the removal of Raveendran, along with family members from the company’s helm.
Prior to this change, over the past four years, Raveendran had concentrated on strategic tasks which included capital acquisition and spearheading the international growth of the company. However, with recognition of the need for resolute leadership during these tumultuous times, he is now set to engage deeply with the day-to-day activities of Byju’s, applying his expertise to navigate the education giant toward its next era of growth and innovation.
Furthermore, as part of a strategic pivot, Byju’s has announced a reconfiguration of its operations, focusing on streamlining for the long haul. The company’s business will be restructured into three targeted divisions: The Learning App, Online Classes & Tuition Centres, and Test-prep sectors. This revised framework is intended to let each business division be more agile, cost-effective, and better positioned to seize market opportunities while still benefiting from the influence of the BYJU’S brand and its ecosystem. Leadership for each unit will be separately appointed, with the mandate to run their respective operations sustainably to guarantee profitability.
These strategic changes are the culmination of a rigorous seven-month operational review and cost optimization initiative steered by the outgoing CEO of Byju’s India, Arjun Mohan. Byju Raveendran, emphasizing this new direction, stated that the reforms signify the dawn of ‘BYJU’S 3.0’, characterized by a leaner and more responsive organization that is prepped to adapt swiftly to the changing contours of the market, particularly within the realm of hyper-personalized education.
In February, during an extraordinary general meeting (EGM), a faction of shareholders passed resolutions demanding the ousting of Raveendran, his wife Divya Gokulnath, and brother Riju Raveendran from their positions within the company. The legality of these resolutions is currently under the scrutiny of the Karnataka High Court. Despite the company’s efforts that have led to thousands of layoffs and significant expenditure reductions, Byju’s valuation has seen a persistent decline, and the firm has failed to meet its loan obligations to US financiers.
By divvying up its operations into three distinct business units focusing on core strengths, Byju’s aims to discover new avenues for growth while maintaining a focus on profitability.
In additional statements made on Monday, Byju’s highlighted that the proposal for an increment in authorized share capital, introduced during a postal ballot and the EGM on March 29, was passed with support from 55 percent of the total votes cast. Although a $200 million rights issue has been set forth providing Byju’s with critical financial resources, the firm is presently hamstrung in utilizing these funds due to an interim order by the National Company Law Tribunal (NCLT). Following a petition from four foreign shareholders, the NCLT has directed that the proceeds from the rights issue be maintained in an escrow account for now, pending a hearing on April 23.
The scrutiny of the voting process, encompassing both the EGM and a postal ballot that concluded on April 6, 2024, was handled by an independent third-party, ensuring the integrity of the process. The passage of the EGM’s proposals sets the stage for Think & Learn Pvt Ltd to issue new shares and conclude the rights issue, which aims at addressing the company’s liquidity concerns – which encompass unpaid staff compensations, regulatory dues, and payments due to vendors. These financial strains were exacerbated by the actions of four foreign shareholders, who, according to Byju’s, opted for frivolous litigation rather than constructive discussion.
With the new organizational structure, and Byju Raveendran reclaiming operational leadership, Byju’s is repositioned to embark on its newest chapter. This phase of innovation-fueled growth is characterized by the large-scale launch of a suite of AI-first products that have already received positive responses in their pilot phase, igniting a beacon of optimism for the education titan.
