BYJU'S Valuation Cut: Edtech To Raise Funding At 99% Valuation Cut

BYJU'S Gets $300 Mn Commitment In Ongoing Rights Issue

SUMMARY

Cash-starved edtech giant BYJU’S has kicked off a $200 Mn rights issue to raise funds from its existing investors

The edtech giant is seeking to raise the fresh capital at a post-money valuation of $225 Mn, a whopping 99% decline from its last valuation of $22 Bn

The embattled edtech giant said the fresh capital will be utilised to fund the ongoing capital expenditure and support general corporate purposes

Cash-starved edtech giant BYJU’S has kicked off a $200 Mn rights issue to raise funds from its existing investors.

The edtech giant is seeking to raise the fresh capital at a post-money valuation of $225 Mn, a whopping 99% decline from its last valuation of $22 Bn, sources told Inc42. This development was first reported by MoneyControl.

In a statement, BYJU’S said that the fresh capital will be utilised to fund the ongoing capital expenditure and support general corporate purposes. The rights issue enables existing shareholders to participate in BYJU’S growth journey, it added.

Founder Byju Raveendran said in the statement, “This rights issue is about those who care the most about BYJU’S stepping up as we continue to turn the company around. Along with being a founder, I am also the largest investor in the company. The funds raised will be exclusively utilised to clear immediate liabilities and meet operational requirements, while maintaining the current rights of our valued shareholders.”

“I am also happy to share that BYJU’S is now less than a quarter away from achieving operational profitability, reflecting the effectiveness of our strategic initiatives and the resilience of our business model,” he added.

BYJU’S also said that its founders have invested more than $1.1 Bn in the company in the last 18 months.

The development comes close on the heels of BYJU’S disclosing its consolidated financials for FY22, almost 22 months after the end of the year. The edtech giant’s net loss surged 81% to INR 8,245.2 Cr in FY22 from INR 4,564.3 Cr in FY21. Operating revenue rose over 120% year-on-year to INR 5,014.6 Cr during the year under review, mostly on the back of improvement in the financial performance of Aakash.

In the financial statement, the startup’s auditor flagged concerns regarding its continuing net losses from operations and accumulated losses and the outcome of the litigation of the $1.2 Bn Term Loan B availed by Byju’s Alpha Inc.

BYJU’S has been fighting on multiple fronts for more than a year now. It continues to be plagued by a host of troubles, including the exit of board members, layoffs, delay in filing financial statements, growing losses, scrutiny of the Enforcement Directorate (ED), and a legal battle with the Board of Control For Cricket in India (BCCI).