Byju’s To Raise Fresh Funds, Cuts $22 Billion Valuation By 90%: Report

The report said that Byju's is looking to raise funds at a price that values the firm at less than $2 billion, against its earlier valuation of $22 billion in the previous funding round in late 2022

Indian edtech start-up, Byju’s, is reportedly looking to raise funds at a discount of over 90 per cent from its previous round, to ease its financial woes. 

The financial crisis-hit start-up is seeking more than $100 million from existing investors via a fresh issuance of shares scheduled for next month, reported Bloomberg citing anonymous sources. The report said that the firm is looking to raise funds at a price that values the company at less than $2 billion. Comparatively, in its earlier funding round conducted in late 2022, the firm valued itself at $22 billion. 

Founder Byju Raveendran would also participate in the share sale to maintain his stake in the firm, the report said citing people familiar with the matter, who requested to remain anonymous as the information isn’t public yet. The company intends to use the proceeds from the share sale scheduled for next month to pay off vendors and help stabilise the business, the report noted. 

The sources mentioned that the company’s founder has been doing all he can to keep the business afloat and to manage the financial pressures. Currently, Byju’s is in the process of selling its US-based kids’ digital reading platform for nearly $400 million and is also engaged in a legal battle with creditors regarding a missed interest payment on a $1.2 billion term loan. The report noted that a spokesperson for Byju’s refused to comment on the matter.

Sources noted that the firm is intent on rebuilding its core business and will ‘double down on recent attempts to jump on to the next big bandwagon in education: generative artificial intelligence for so-called hyper-personalized learning’, after the share sale. 

Byju’s was earlier known as Think & Learn Pvt and is backed by the Chan Zuckerberg Initiative, General Atlantic, and Prosus NV. The company earlier raised billions of dollars to finance its global acquisition spree before it ended up in a global tech funding slowdown. Multiple shareholders in the company are expected to take part in the share sale, the report said citing sources.