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Edtech firm Byju's parent Think & Learn Pvt Ltd on Monday announced that it will raise $200 million through a rights issue to its existing shareholders in a bid to achieve operational sustainability and fund ongoing capital expenditure.
The round will reportedly be at a post-money valuation of $220-250 million, a 99 per cent drop from a peak of $22 billion fetched during its last equity funding round in 2022.
After consecutive cuts to its valuation by major investors including Prosus and Blackrock, the firm was noted to be worth $1 billion last year.
A rights issue is a call for existing shareholders to increase their stake in a company by buying additional shares at a discount. Byju’s rights issue will close by the end of February.
The founders have already invested $1.1 billion in the embattled firm over the last 18 months, the company said in a statement, adding that it is less than a quarter away from achieving operational profitability.
"The funds raised will be exclusively utilised to clear immediate liabilities and meet operational requirements, while maintaining the current rights of our valued shareholders," Raveedran said in a letter to the company’s shareholders.
“It has been 21 months since our last external capital raise, during which we have cut our burn and worked to become a lean organisation, razor-focused on execution… This capital raise is essential to prevent any further value impairment and to equip the company with necessary resources to deliver on its mission,” he added.
Byju’s reported a loss of Rs Rs 8,245 crore in FY22, along with a consolidated revenue jump of 118% to Rs 5,298 crore, according to financials filed last week.
The company is also dealing with an insolvency petition from overseas lenders that was taken to the court last week, along with a public relations crisis due to mass layoffs conducted since 2022 and allegations of accounting irregularities.