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

Think and Learn, the parent entity of edtech giant BYJU’S, has reportedly secured a commitment of $300 Mn from investors for its ongoing rights issue, expected to conclude by February end.

In January, BYJU’S initiated a rights issue to raise $200 Mn through equity rights, valuing the enterprise between $220-250 Mn, news agency PTI reported. This valuation marks a significant decline of 99% from its peak valuation of $22 Bn.

The edtech company is slated to convene an Extraordinary General Meeting (EGM) on February 22.

“BYJU’S has received a total commitment of around $300 Mn for the rights as on date. Some investors have also suggested increasing the rights issue size but the priority for the company is to close the existing issue successfully,” a source said as quoted in the report.

Additionally, negotiations are reportedly underway with disgruntled investors to encourage their participation in the rights issue.

“BYJU’S is in discussion with miffed investors also. The company expects that they will also invest, otherwise their shareholding will reduce by almost 50%,” the source added.

BYJU’S has proposed to appoint two independent directors to its board in an effort to bolster transparency. However, the appointment is contingent upon the declaration of financial results for the fiscal year 2023.

The troubled edtech giant anticipates finalising its financial results for the fiscal year 2023 within this quarter, thereby achieving full compliance with regulatory requirements.

Subsequently, the company intends to proceed with the appointment of two independent directors to its board. This proposal is a component of the ongoing discussions with dissatisfied investors who have called for an Extraordinary General Meeting (EGM) scheduled for February 23.

The EGM notice has garnered support from investors ncluding General Atlantic, Peak XV, Sofina, Chan Zuckerberg Initiative, Owl Ventures, and Sands Capital. Collectively, these investors hold approximately 30% stake in BYJU’S.

Over the past two years, BYJU’S has grappled with a myriad of challenges, ranging from uncontrolled losses to business model obstacles, and conflicts with investors, along with legal disputes with creditors and vendors.

BYJU’S is expected to report total revenue of around INR 6,500 Cr in the financial year 2022-23 or FY23, which ended March 31, 2023, Inc42 reported earlier.

This would be 23% higher than the consolidated income of INR 5,298 Cr reported by parent entity Think & Learn Private Limited in FY22.

BYJU’S net loss surged 81% YoY to INR 8,245.2 Cr (close to $1 Bn) in FY22 as WhiteHat Jr and other loss-making acquisitions continued to weigh down the bottom line. In FY22, the startup’s total expenses nearly doubled to INR 13,668 Cr.