BYJU'S aims to raise $200-mn via equity rights issue at valuation of $220-250-mn

New Delhi: Edtech major BYJU'S is looking to raise $200 million through equity rights issue at an enterprise valuation in the range of $220-250 million. Sources aware of the development said that the company will issue equity at low valuation only for this tranche of issue. BYJU'S valuation peaked at $22 billion when it raised funds in March 2022. “The board of Think and Learn Private Limited (TLPL) on January 29 launched the raising of funds $200 million by way of a rights issue to all its equity shareholders to support its ongoing efforts to drive growth and achieve operational sustainability,” the company said in a statement.

Sources said that the issue will close by the end of February. “BYJU'S will raise $200 million at enterprise valuation of $220-250 million. While the valuation of the firm is significantly higher, the valuation of $220-250 million is for this rights issue only,” a source said. The company said that the proposed rights issuance by TLPL aims to fund the ongoing capital expenditure and support general corporate purposes. “As the largest shareholders, the founders of BYJU'S have already demonstrated their commitment to the company by personally investing more than $1.1 billion in the last 18 months,” the statement said.

The company has written a letter to shareholders informing them about the rights issue, in which founders expressed the challenges the company has faced in recent months and their unflinching belief in the mission of BYJU'S. Despite the changing macroeconomic environment, they emphasized the company's resolve and the tough decisions made in the best interest of the company. The letter acknowledged the shareholders' integral role in the company's journey and proposed this rights issue to offer existing shareholders an equal opportunity to participate in the capital raise.

Byju Raveendran, Founder of BYJU'S said: “This rights issue is about those who care the most about BYJU'S stepping up as we continue to turn the company around. Along with being a founder, I am also the largest investor in the company. The funds raised will be exclusively utilized to clear immediate liabilities and meet operational requirements, while maintaining the current rights of our valued shareholders.”

Raveendran said that BYJU'S is now less than a quarter away from achieving operational profitability, reflecting the effectiveness of the company's strategic initiatives and the resilience of its business model. BYJU's recently declared its financial results after a delay of about 22 months in which it reported a widening of operational loss to Rs6,679 crore in FY22, mainly due to losses incurred by subsidiaries White Hat Jr and Osmo. The company has posted an operational loss (EBITDA) of Rs4,143 crore in FY 2021, according to its regulatory filing. Its revenue more than doubled to Rs5,298.43 crore in FY22 from Rs2,428.39 crore in FY21.