One Rotten Apple Shouldn't Affect The Sector: Ronnie Screwvala on Byju's

“…One rotten apple should not affect the entire edtech sector…”

This is what renowned serial entrepreneur and investor, Ronnie Screwvala, said holding Byju Raveendran, CEO and co-founder of Byju’s, and the company's investors, for the current turmoil the edtech giant is grappling with. 

Speaking at the ASU+GSV & Emeritus Summit in Gurugram, Screwvala emphasized the need for accountability but stood firm on the belief that the troubles at Byju’s should not cast a shadow on the entire edtech sector.

Byju Raveendran along with its nearly 51 investors, are responsible for the beleaguered edtech firm’s current predicaments, said Screwvala, who is also the executive chairman and co-founder of edtech platform UpGrad.

A Call for Responsibility: Byju’s CEO and Investors Under Scrutiny

Screwvala expressed his concern over the laid-back attitude in board meetings, stating, “They (investors) felt that it was more important in board meetings to ask when's your next secondary versus ‘I don't see a CFO.’ And so, that one single aspect I don’t think is going to hold the whole education sector to ransom.”

The co-founder of UpGrad underscored the need for investors to actively engage in discussions and raise pertinent questions. 

He supported the recent decision by major Byju’s shareholders to convene an extraordinary general meeting (EGM) for a management change, asserting that if critical questions had been asked earlier, the company's trajectory might have been different.

Byju’s Valuation Woes and Corporate Governance Lapses

Byju’s, once a darling of the edtech sector, has been grappling with a series of challenges, including valuation cuts, corporate governance lapses, and funding difficulties. Screwvala, known for his candid opinions, has been a vocal critic of Byju’s and recently expressed support for the move to oust Raveendran.

Fiduciary Responsibility Emphasized

Ronnie Screwvala stressed the importance of fiduciary responsibility for board members and investors.

In a social media post on platform X, he said

Finally 🤦‍♂️ someone smelt the coffee!!

Hope its not a whiff and then whimper but they will stay the course and get this done - for the whole eco system ! For india as an investment destination ! For just credibility overall of an otherwise sunrise and sunshine sector https://t.co/PkgtI7dONp

— Ronnie Screwvala (@RonnieScrewvala) February 1, 2024

Screwvala said that, to mitigate such instances, board members and investors need to be active and ask the right questions.

“Why would anyone stop asking questions after they put in USD 100 million to USD 4 billion? You have the right to do that. In those exact companies, if people had asked questions that they're now beginning to ask, four years back - it could have been a different story. It (Byju’s) may not have even raised the USD 4 billion it did,” he said.

Funding Crunch in EdTech Sector: The Need for Frugality

Screwvala’s comments come amidst a severe funding crunch in the Indian edtech sector. He cautioned against excessive funding, advocating for a more measured approach. “This sector is very high on impact. It will be very high on value creation, but we've got to find the right mix. And for that, I don't think we need the money that everyone keeps talking about in this sector,” he stated, emphasizing the need for financial prudence.

Focus Beyond Funding: A Lesson for Entrepreneurs

Ronnie Screwvala urged entrepreneurs to shift their focus away from funding as the primary concern.

He advised, “Many entrepreneurs tend to focus on funding as their ‘first stop’, where it should be ‘number five on your list’.”

As the edtech sector grapples with challenges, Screwvala's call for accountability and a measured approach to funding resonates as a timely reminder for the industry to navigate uncertainties responsibly. The outcome of the impending extraordinary general meeting at Byju’s will undoubtedly be closely watched by stakeholders across the edtech landscape.

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