In order to keep his ownership in the business, Byju Raveendran will take part in the share sale: Report
According to two people familiar with the matter, the Bengaluru-based startup, which was once considered the most valuable in India, plans to raise between $100 million and $300 million in new funding through a rights issue. Byju Raveendran, the chief executive and co-founder of the edtech group, has also agreed to step down from the top role in the interest of improved governance following the new funding.
According to persons familiar with the situation, the troubled Indian education provider is requesting more than $100 million from current investors through a new share offering scheduled for next month, at a price that places the company’s valuation below $2 billion. That is less than the $22 billion it received in its late 2022 funding round, according to Bloomberg.
According to insiders who asked not to be identified since the information is confidential, the company’s founder, Byju Raveendran, would take part in the share sale in order to maintain his ownership position. The company, which has been struggling financially for a number of months, stated that it will pay its suppliers and stabilize its operations using the money raised from the share sale that is scheduled for next month.
According to Bloomberg, In an effort to relieve the company’s financial strain and keep it afloat, Raveendran has been going all out. The company is in the midst of a legal dispute with creditors over the nonpayment of interest on a $1.2 billion term loan, and it is also in the process of selling its kids’ digital reading platform, which is based in the US, for approximately $400 million.
An official from the corporation declined to provide a statement.
Following the share sale, the company is concentrating on reestablishing its core business and will intensify its recent efforts to join the next great educational trend: generative artificial intelligence for so-called hyper-personalized learning, the person said.
Before it encountered a global digital investment slowdown, Byju’s, then known as Think & Learn Pvt, had raised billions of dollars to support a global acquisition binge, backed by the Chan Zuckerberg Initiative, General Atlantic, and Prosus NV. According to the person, a number of the company’s shareholders are anticipated to take part in the share sale.