Byju’s, once valued at $22 billion, seeks funding at $2Bn valuation: Report

Byju’s, the Bengaluru-based edtech giant, which has been in all sorts of troubles off late, is now reportedly willing to accept a valuation of as low as $2 billion as it pursues new fundraise, reports TechCrunch. The company, which was once valued at $22 billion, is looking to raise $100Mn to $200Mn through a rights issue. Byju Raveendran, the CEO and co-founder, is expected to invest in the new funding.

This marks a drastic shift in fortune for Byju’s, once touted as the epitome of Indian startup ecosystem. The edtech firm spent over $2.5 billion in 2021 and 2022, acquiring several companies globally. However, its valuation had soared to as high as $50 billion at one time, a figure that now appears to be dramatically reduced. Valuations for private companies though, are always questionable since they aren’t determined by free floating public investments, as is the case with listed companies.

Byju’s had been seeking new funding for almost a yea now, and talks last year to raise about $1 billion were derailed after the exit of Deloitte as its auditor along with three key board members. Instead, Byju’s raised less than $150 million in that round from Davidson Kempner. BlackRock had also reduced the value of its holding in Byju’s, implying a valuation of about $1 billion.

The edtech giant was preparing to go public in early 2022 through a SPAC deal valued at up to $40 billion. However, globally worsening geopolitical and macroeconomic conditions, coupled with Byju’s own troubles (including several critical questions on corporate governance) prompted the company to postpone its IPO plans. The company has faced increasing pressure from investors to address unresolved governance issues.

Despite being backed by prominent names in the industry, including Peak XV Partners, Lightspeed, General Atlantic, Prosus NV, UBS, and the Chan Zuckerberg Initiative, Byju’s is currently grappling with challenges such as raising capital, meeting payroll obligations, and managing a debt exceeding a billion dollars. It also faces legal headwinds, specially around an alleged mismanagement of $533 Million from lenders who were part of a larger loan to the company.

Read more at thetechportal.com

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