Byju's To Raise $200 Million Via Rights Issue At Sub-$250 Million Valuation

Byju’s is set to raise $200 million, or about Rs 1,600 crore, through a rights issue at a steep valuation haircut, as the edtech pulls out all stops to navigate myriad legal and financial challenges.

The proposed rights issuance by Think & Learn Pvt. aims to "fund the ongoing capital expenditure and support general corporate purposes", it said in a statement on Monday.

"As the largest shareholders, the founders of Buju's have already demonstrated their commitment to the company by personally investing more than $1.1 billion in the last 18 months," it said.

Though the company didn't specify the valuation at which the fundraise will happen, according to people with knowledge of the matter who spoke on condition of anonymity, it is taking place at a post-money valuation of about $220–230 million, pointing to a steep cut from its once $22-billion worth.

"Over the last many months, strategic measures have been taken to optimise costs and become a lean organization focused on execution. They stressed the importance of raising capital to create a glidepath for strong shareholder value and prevent further value impairment," the statement said.

"This rights issue is about those who care the most about Byju's stepping up as we continue to turn the company around," founder Byju Raveendran said. "Along with being a founder, I am also the largest investor in the company," he said.

The funds raised will be exclusively utilised to clear immediate liabilities and meet operational requirements, while maintaining the current rights of the valued shareholders, he said.

Raveendran said that the edtech was now only a "quarter away from achieving operational profitability".

Byju's unicorn status now stands quashed, as its valuation dips below the $1-billion mark. It also joins the likes of PharmEasy that kicked off rights issues to stay afloat amid a tough funding environment.