Think and Learn Pvt Ltd, the parent company of Byju's, is set to raise $200 million through a rights issue from existing investors, starting January 29 and will be open for the subsequent 30 days. The post-money valuation stands at $225 million, a 99 percent drop from its last funding round at $22 billion.
Current investors of the edtech firm, including founder Byju Raveendran, are likely to join the round, as per a report by moneycontrol. The subscription price is deliberately set low to encourage broader investor participation. Generally, rights issues are priced below a company's fair market value to attract existing investors to increase their stake.
In a formal communication to shareholders dated January 29, Raveendran notified them of the board's choice to raise funds via a rights issue. As per sources cited by the report, Byju's has trimmed its core business's monthly expenditure to Rs 50 crore and targets operational break-even within 2-3 months. The company intends to revamp the Board post the FY23 audit.
Currently, the company's board comprises Raveendran, his co-founder and wife Divya Gokulnath, and his brother Riju Ravindran, after other members departed last year.
Commenting on the fundraise, Raveendran said, "We believe an expeditious capital raise will provide the company with the resources it needs to rebuild and scale. This shall be used for the continuation of business operations, to manage obligations and to make the company more sustainable."
This development arises as Byju's, once esteemed as an edtech giant with a valuation exceeding $22 billion, grapples with significant financial challenge.