In a strategic move, the board of Think and Learn Private Limited (TLPL), the parent company of leading ed-tech platform BYJU'S, has given the green light for a rights issue to raise $200 million from existing investors. This move is aimed at supporting BYJU'S continuous efforts to drive growth and attain operational sustainability.
The planned rights issuance by TLPL is designed to finance ongoing capital expenditures and support general corporate objectives. This initiative allows current shareholders to actively participate in BYJU'S growth trajectory, emphasizing a collective commitment to the platform's mission, as outlined in a statement by the company.
The rights issue is set at a post-money valuation of $225 million, representing a substantial 99% reduction from the company's previous funding round valuation of $22 billion. Despite this, the founders of BYJU'S have personally injected over $1.1 billion into the company within the last 18 months, showcasing their unwavering dedication to the platform's vision.
In a letter addressed to shareholders, the founders acknowledged the challenges faced by the company in recent months. They reaffirmed their belief in BYJU'S mission, highlighted strategic measures taken to optimize costs, and emphasized the importance of raising capital to safeguard shareholder value.
Byju Raveendran, the founder of BYJU'S, expressed that the rights issue is an opportunity for those deeply invested in the success of BYJU'S to contribute to its turnaround. Raveendran, being the largest investor in the company, assured that the funds raised would be used to settle immediate liabilities, meet operational needs, and maintain the rights of existing shareholders. Notably, BYJU'S is nearing operational profitability, showcasing the effectiveness of strategic initiatives and the resilience of its business model.
The rights issue underscores BYJU'S proactive approach to securing capital for sustained growth, offering existing shareholders an equitable opportunity to participate in the capital raise without specific valuations. This move aligns with the company's commitment to ensuring a promising future for all stakeholders.
BYJU'S, supported by investors such as General Atlantic, Prosus, and Silver Lake, has faced recent valuation adjustments, with BlackRock and Prosus NV reducing its valuation. However, the rights issue signals BYJU'S determination to navigate challenges and maintain its position as a leader in the edtech space.
