“Our director’s decision to step down from Baiju’s board came as it became clear that he (Dresenstock) was unable to fulfill his fiduciary duty to serve the long-term interests of the company and its stakeholders,” the process said in a statement.
“ByJuice has grown significantly since our initial investment in 2018, but over time, its reporting and governance structure has not evolved sufficiently for a company of that scale,” Process said. However, sources said the company, which currently holds a 9.6% stake in Byjuice, has no plans to exit the startup.
Byjus said in a statement that it has noted the observations of its investors. “We have updated our stakeholders on concrete steps taken to improve corporate governance and financial reporting,” a company spokesperson said.
The process, which has invested $536 million in edtech startups since 2018, has marked the company’s valuation at $5.1 billion. At its peak, Byjuice was valued at $22 billion. Process said that as a shareholder of Byjuice, it will continue to assert its rights in cooperation with other shareholders and government authorities to protect the long-term interests of the company and its stakeholders. “Byjus sits at the intersection of India and education, two very important and strategic areas of process investment. “Although we no longer have a representative on the company’s board, we continue to believe in Baiju’s potential,” the firm added.
The development comes at a time when Byjus is already under scrutiny by the authorities, who are understood to have ordered a probe into the books of the Ministry of Corporate Affairs. The resignation of the startup’s auditor Deloitte and three of its board members—representatives of Peak XV Partners (formerly Sequoia India and Southeast Asia), Process, and the Chan Zuckerberg Initiative—resigned over the delay in the startup’s 22222222222222222222 results, and the resignation of Byjus’ crisis.
The Bengaluru-based startup has recently joined the fray as it seeks to address its corporate governance practices amid growing shareholder concerns. State Bank of India Chairman Rajneesh Kumar and Ex Infosys CEO and early investor TV Mohandas Pai to head the advisory committee tasked with advising the company’s board and CEO Baiju Ravindran.
Process’ statement comes shortly after the steering committee of ad hoc term lenders, which owns more than 85 percent of Baiju’s $1.2 billion term loan, said it would work with the startup to renegotiate the loan terms by August 3.
The startup’s tussle with lenders that has reached the courtroom is worrying for its partners, and a settlement will bring them little relief.