Byju's rights issue at $225 mn valuation

Edtech company Byju's has agreed to a post-money valuation of $225 million as it approaches existing investors for $200 million to stay afloat, two people aware of the matter said, a stunning decline from the $22 billion it commanded as the country's most valued startup just two years ago.

Think & Learn Pvt. Ltd, the parent of Byju's, said it is looking to raise the amount in a rights issue, which is open only to existing investors.

Investors have 30 days to decide if they want to participate. The steep discount means those who do not participate will face massive erosion of their shareholding, the people cited above said, given that shares are being offered at 0.1% of its peak valuation in its last funding round.

"The funds raised will be exclusively utilized to clear immediate liabilities and meet operational requirements, while maintaining the current rights of our shareholders," founder Byju Raveendran said in a media statement.

The move helps the company raise money immediately at a nominal value, not considering the fair value calculated based on its subsidiaries, associate companies and other assets.

This means that it has not taken into account the valuation of any of its acquisitions including Aakash Education Services, Great Learning and Epic. It also doesn't take into account its largest liability-a $1.2 billion overseas loan.