Know about how Byju's and its founder went from riches to financial struggles, facing legal challenges and investor concerns along the way.
Ed-tech giant Byju's, led by its founder Byju Raveendran, has faced a significant downturn in its financial fortunes, leading to Raveendran's removal from the Forbes Billionaires list and his net worth dwindling to zero. The company, once valued at a peak of $22 billion, has seen its valuation plummet to $1 billion. To support his employees during this challenging time, Raveendran even mortgaged his house to pay their salaries.
The National Company Law Tribunal (NCLT) has intervened, restraining Byju's parent company, Think and Learn, from proceeding with its ongoing rights issue, which began on May 11. The NCLT has instructed Byju's to provide detailed information about its shareholders before and after the allotment of equities on March 2, related to the first tranche of the rights issue.
Investors, including Prosus, General Atlantic, Sofina, and Peak XV, have approached the tribunal, expressing concerns about the management of Byju's and the rights issue. Byju's had claimed 100 percent commitment for a $200 million rights issue in February but initiated the rights issue at a significantly lower valuation compared to its peak enterprise value.
It is reported that the first rights issue failed to raise the intended amount, leading to the initiation of a second round worth $100 million. However, there are doubts about whether even $100 million was raised from the first rights issue, according to investor sources.
Byju's contends that the ongoing rights issue is a continuation of the February rights issue, allowing existing shareholders to subscribe to the left-out portion on a pro-rata basis. Despite queries sent to Byju's, no response was received.
Byju's and its founder Byju Raveendran have experienced a stark decline in financial fortunes, with Raveendran's net worth reducing to zero and the company's valuation plummeting. Legal interventions and investor concerns surround the ongoing rights issue, highlighting the challenges faced by the once-prominent ed-tech company.
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