Byju’s, India’s leading ed-tech company founded by Byju Raveendran, has been facing significant financial challenges. These struggles have resulted in Raveendran’s removal from the Forbes Billionaires list and a drastic reduction in his net worth. Once valued at Rs 17,545 crore, Raveendran’s net worth has now dwindled to zero. The company’s valuation, which once stood at $22 billion, has plummeted to a mere $1 billion.
In a drastic move to support employees, Raveendran resorted to mortgaging his house to ensure timely salary payments. The entrepreneur’s journey from riches to rags underscores the company’s financial turmoil. Furthermore, the National Company Law Tribunal (NCLT) has intervened to maintain the status quo regarding an ongoing rights issue initiated by Byju’s. The NCLT directive has restrained Byju’s from proceeding with the rights issue until further notice.
The company’s shareholders, which include Prosus, General Atlantic, Sofina, and Peak XV, had approached the NCLT seeking an injunction against the company’s management and the proposed rights issue. Byju’s had previously claimed to have secured a USD 200 million commitment for a rights issue in February. However, the company’s first rights issue fell short of its target, prompting a second round of fundraising for USD 100 million. Investors have also raised concerns about the company’s ability to raise the intended funds and have questioned the narrative presented by Byju’s.
The NCLT has scheduled a hearing for July 4 to address the matter. Byju’s has yet to respond to queries regarding the ongoing issues, but sources have indicated that the current rights issue is not a separate tranche but rather a continuation of the initial fundraising effort. Despite receiving commitment for a USD 200 million subscription, the company has not successfully raised the full amount. The company’s financial struggles have raised concerns among investors and highlight the challenges faced by the ed-tech sector.
