?? Byju’s backers face the heat

Pressure from limited partners, the source of capital behind technology bets, is driving the largest startup investors in India to finally confront the BYJU'S question.?

This past week, Prosus and Peak XV Partners (previously Sequoia Capital India) spoke about the governance gaps at the edtech giant. Peak XV made observations in a letter to its LPs, reports said, whereas Prosus Group issued a sharply critical statement on how Byju’s has acted.

Representatives of the two investors quit the company’s board last month. (So did Chan Zuckerberg Initiative .)?

Prosus revealed that Byju’s ignored its advice on corporate governance. The Dutch group is the most prominent name on the company’s cap-table in terms of the size of the investment and shareholding. Its $536-million bet constitutes 10% of the total funding it has deployed in India.

Peak XV became the first high-profile backer of Byju’s as the latter transitioned from being an offline player to the edtech sector’s poster child. Peak XV has sold a chunk of its stake. Its remaining 6% holding was worth more than $1 billion at Byju’s highest valuation of $22 billion.?

Clearly, a lot is at stake for Peak XV, Prosus and their bankrollers.

“There are common financiers in Prosus and Peak XV, and many have asked questions about the board exits at Byju’s. They also want to know how their financial positions in the company will pan out,” said an investor who interacted with LPs recently.

Prosus and Peak XV have ended their silence months after media reports flagged serious issues at Byju’s. Why did they wait so long?

“It makes us wonder what else we are missing,” said a person who works at an LP firm.

Aditi Shrivastava

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