Tech3 | Byju's’ problem is everybody's problem; Dunzo funding en route; and more

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In today’s newsletter:

• Byju's effect? Tougher norms coming for unlisted cos??
• Dunzo funding en route?
• Canada's loss is US, UK's gain?

Byju's effect? Tougher norms coming for unlisted cos

If the government gets its way, the sins of India's most valuable unicorn may be laid on other startups.

Driving the news

In what is reportedly the fallout of alleged governance mis-steps by Byju’s, the Company Law Committee is mulling tighter governance norms for ‘bigger’ startups.

• Inter-ministerial discussions on amending the Companies Act are currently underway

• Mandatory submission of quarterly statements by large unlisted companies is being considered

The committee is also considering whether unlisted companies should be subjected to higher levels of regulation for financial reporting.

• However, the definition of ‘big’ unlisted companies has yet not been finalised

The Byju’s scare: Byju’s, the edtech unicorn valued at $22 billion in its last funding round in October 2022, has recently been in the limelight for several governance issues.

• In June, big four firm Deloitte quit as Byju’s auditor after a long delay in the company’s FY22 results

• Around the same time, Byju's saw three key investor board members stepping down due to operational disagreements with the founder?

Earlier this year, lenders of the company also accused it of hiding $500 million of credit.?

Funding winter’s tale

With the startup ecosystem in the firm grips of a funding winter, poor corporate governance practices are coming to light more frequently.

• Over the last two years, venture-backed startups, such as BharatPe, Zillingo, DeHaat, Pristyn Care, GoMechanic, and Mojocare, have been scrutinized for poor corporate governance practices

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• In every instance, the issues were discovered only after close scrutiny of these companies' books and operations

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