How Corporate Governance issues led by BYJU’s fall? A lesson for Startups
Once-celebrated founder Byju Raveendran, who’s been accused of mismanagement by disgruntled investors, is struggling with financial issues of its EduTech Startup. Three shareholders including Prosus Ventures and Peak XV Partners, formerly Sequoia Capital India, has left the board of Byju’s last year over differences with Raveendran on issues such as business processes and internal controls. At its peak, the ed-tech company was valued at $22 billion. Business boomed during the two years of the COVID-19 pandemic, but as infections subsided and classrooms reopened, its cash reserves dwindled. It has been pointed out by various Investors that governance shortcomings has contributed to the startup’s mounting losses. However, Byju’s saga has drawn some insightful lessons for other startups which might help them to avoid such governance issues and eventually fall. Some lessons are building a robust governance framework, sustainable growth over blitzscaling, strong financial management team, open communication etc.
