Byju’s kickstarts $200 million rights issue at 99% valuation cut

30 Jan 2024 , 01:02 PM

Byju’s has launched a rights issue to fund up to $200 million, which, according to persons familiar with the matter, may offer shares to current investors at a 99% discount to the edtech firm’s peak valuation.

The rights issue will be offered for subscription for 30 days, Byju’s informed investors in a letter on Monday.

Byju’s, which is dealing with various issues and is in desperate need of additional funding, is expected to price the share offering at as low as $5 per share, giving it a post-money worth of roughly $220-250 million, according to the sources.

Byju’s highest valuation was $22 billion in 2021, when it last launched an equity funding round.

However, if the rights offer is not fully subscribed, and the business must seek external investors, the fair market value will be determined independently, according to sources familiar with the negotiations.

The ailing online education company has recently received major downgrades from many investors, including BlackRock, who valued it at about $1 billion. Prosus, another important investor, last estimated Byju’s worth at $3 billion.

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