Byju’s, the world’s most valuable edtech startup, has cut its valuation ask by 99% in a rights issue it launched Monday as the Indian firm works to address its working capital needs. The startup is looking to raise $200 million in the rights issue, a capital it said is “essential to prevent any further value […]
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Byju’s, the world’s most valuable edtech startup, has cut its valuation ask to $250 million in a rights issue it launched Monday as the Indian firm works to address its working capital needs. The startup is looking to raise $200 million in the rights issue, a capital it said is “essential to prevent any further value impairment.”
The startup is resetting its valuation to “next to nothing” in the rights issue, where all existing investors have an opportunity to participate, according to a source familiar with the matter. If Byju’s succeeds in raising $200 million, the valuation of the startup will be in the range of $220 million to $250 million, a 99% drop from the $22 billion value that the startup had previously attained.
In a letter to shareholders Monday, Byju’s founder Byju Raveendran said the founders of the edtech group have invested $1.1 billion into the Bengaluru-headquartered startup in the last 18 months and seek continued support from the investors.
“We have made immense personal sacrifices for the sake of the company. We have spent our lives building this company and are fervent believers in its mission,” Raveendran wrote in the letter, seen by TechCrunch.
The rights issue comes as Byju’s looks to secure capital amid a grave funding crunch. The startup, which spent $2.5 billion acquiring more than a dozen firm in 2021 and 2022, has raised more than $5 billion in equity and debt from backers including Peak XV, Lightspeed, Chan Zuckerberg Initiative, BlackRock, UBS, Prosus Ventures and B Capital.
“It has been 21 months since our last external capital raise, during which we have cut our burn and worked to become a lean organization, razor-focused on execution. The board believes it is imperative that the company raises capital in order to create a glidepath to deliver strong shareholder value,” Raveendran wrote in the letter.
More to follow.
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