Known to be the world's top edtech startup, Byju's cuts valuation 99% in a $200 million rights issue, addressing financial challenges and seeking investor support.
Founded in 2011, Byju's is an Indian edtech firm that provides personalised learning programs for students from K–12 & competitive exam aspirants, including JEE.
Recently, the world's top edtech startup faces a severe funding crunch after spending $2.5 billion on acquisitions in 2021-2022.
Founders Byju Raveendran & Divya Gokulnath invested $1.1 billion in the last 18 months, seeking continued support from investors to sustain the business.
The founders highlight the significant personal sacrifices made for the company's mission in a letter to shareholders.
The founders stated that in the previous year, the startup struggled to raise funds, facing issues with the auditor and key board members.
Byju's plans to reduce its debts and operational expenses by issuing new shares will result in a significant decrease in its value.
The startup postponed its IPO plans that was going to take place in early 2022 due to market downturns following Russia's invasion of Ukraine.
Due to this backlash, some investors express concerns about Byju's business decisions, leading to the rights issue as an option to part ways.