Mumbai: Troubled edtech startup byju’s have launched a rights issue To Raise $200 million from existing investors Evaluation Valued at around $225 million-$230 million, it is down 99% from its peak valuation of $22 billion as it faces a funding crunch. The company said in a statement that the funds will be used to repay immediate liabilities and meet operational requirements.
“It has been 21 months since our last external capital raise, during which time we have cut our costs and worked to become a leaner organisation, focused on execution. This capital increase is necessary to prevent any further value loss and to equip the company with the resources needed to fulfill its mission,” founder Byju Raveendran said in a note to shareholders, which was reviewed by TOI. Raveendran claimed that the founders have invested more than $1.1 billion in the company in the last 18 months. “In these uncertain times, we have not shied away from taking a number of tough decisions in the best interests of the company and we will continue to do so in the coming months,” Raveendran said.
The Bengaluru-based startup, which was once chased by investors who had collectively invested more than $5 billion in the firm, recently called on its overseas investors over the failure to repay the $1.2 billion term loan raised by the company in 2021. Has been dragged to insolvency tribunal by lenders. Over the past months, the startup has seen several senior-level employees exit the company, seen a series of valuation cuts by investors and has been embroiled in litigation. In a much-delayed filing, the startup last week disclosed a consolidated loss of over Rs 8,000 crore for FY22.
Raveendran said Byju’s is less than a quarter away from achieving operating profitability. The company is yet to file FY23 results. From October 2022, the company has laid off more than 5,000 employees to curb costs. It is also trying to sell some of its assets to repay the term loan.
“It has been 21 months since our last external capital raise, during which time we have cut our costs and worked to become a leaner organisation, focused on execution. This capital increase is necessary to prevent any further value loss and to equip the company with the resources needed to fulfill its mission,” founder Byju Raveendran said in a note to shareholders, which was reviewed by TOI. Raveendran claimed that the founders have invested more than $1.1 billion in the company in the last 18 months. “In these uncertain times, we have not shied away from taking a number of tough decisions in the best interests of the company and we will continue to do so in the coming months,” Raveendran said.
The Bengaluru-based startup, which was once chased by investors who had collectively invested more than $5 billion in the firm, recently called on its overseas investors over the failure to repay the $1.2 billion term loan raised by the company in 2021. Has been dragged to insolvency tribunal by lenders. Over the past months, the startup has seen several senior-level employees exit the company, seen a series of valuation cuts by investors and has been embroiled in litigation. In a much-delayed filing, the startup last week disclosed a consolidated loss of over Rs 8,000 crore for FY22.
Raveendran said Byju’s is less than a quarter away from achieving operating profitability. The company is yet to file FY23 results. From October 2022, the company has laid off more than 5,000 employees to curb costs. It is also trying to sell some of its assets to repay the term loan.
