Byju's faces investor revolt, EGM seeks urgent board fix

In a recent development, investors of edtech giant Byju’s have reportedly expressed concerns about the founder, Byju Raveendran’s active involvement in the day-to-day operations of the company, according to undisclosed sources.

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This revelation coincides with Byju’s initiation of a $200 million fundraise through a rights issue on January 29. The valuation for this fundraising effort is anticipated to range between $230 million and $250 million, a significant decrease compared to the company’s previous funding round at a valuation of $22 billion.

The troubled edtech company is facing financial constraints and requires capital for its daily operations. By opting for a rights issue, Byju’s aims to raise capital through a participatory pro-rata method, allowing existing shareholders to maintain their proportional ownership by purchasing additional shares at a predetermined price. This approach safeguards staff stock options or ESOPs in accordance with the terms, permitting the company to issue more options to employees to compensate for the loss in value.