Byju’s, an edtech company, is reaching out to investors like Peak XV Partners, General Atlantic, Chan-Zuckerberg Initiative, and Prosus, who opposed its rights issue and tried to remove founder Byju Raveendran. They now have 72 hours to join the funding round.
Byju’s aimed to raise $200 million in January but faced challenges due to a significant drop in valuation, now around $220-250 million, down from its peak of $22 billion. Byju Raveendran sent a letter to investors, offering them a chance to participate.
Byju’s Founder Invites Shareholders to Join Turnaround Story
Byju Raveendran, the founder of Byju’s, expressed his heartfelt appreciation to shareholders for their support during challenging times. He highlighted the successful closure of the recent rights issue, a pivotal step in ensuring the company’s sustainability and continued growth amid economic uncertainties. With over 50% of votes favouring increasing authorized share capital, there’s evident confidence in Byju’s prospects.
Raveendran reiterated his steadfast commitment to inclusivity, emphasizing his longstanding vision of collective progress. He sees each milestone as not an individual achievement but a shared journey, with shareholders playing an integral role. Despite any previous limitations, Raveendran extends an olive branch to those who couldn’t participate initially, inviting them to join hands in shaping Byju’s future trajectory.
Acknowledging the interest of third parties, Raveendran underlined the paramount importance of existing shareholders. Their continued support and involvement remain central to Byju’s ethos. Thus, the company is exploring avenues to extend this opportunity exclusively to its loyal shareholders, reinforcing its dedication to fostering a sense of unity and collaboration within the Byju’s community.
Byju’s Investor Meeting Highlights
As per a source, none of the four investors attended the Extraordinary General Meeting (EGM), which lasted about half an hour. However, representatives from the law firm Trilegal were present to represent these investors. On the other hand, around 20 investor representatives attended the meeting alongside Think & Learn management.
Concerns about the postal ballot were raised during the meeting, and Byju’s management addressed these queries. Previously, Byju’s founder, Raveendran, mentioned in a letter to shareholders that over 50% of votes favored increasing the authorized share capital in response to the postal ballot announced on March 7.
The voting process for the resolutions discussed in the recent meeting will continue until April 6. Additionally, the next hearing for the plea filed by investors in the National Company Law Tribunal (NCLT) is scheduled for April 4, where all case issues will be addressed. Details regarding voting and rights issues are pending an independent scrutinizer’s report, currently in progress. Moreover, on March 28, the NCLT declined to postpone an extraordinary general meeting convened by Byju’s board of directors to raise authorized capital for implementing the rights issue.
Byju’s Legal Proceedings Update and Rights Issue Details
The National Company Law Tribunal (NCLT) has scheduled a hearing for April 4, where various issues will be discussed alongside the ongoing case.
Earlier, on February 27, the NCLT instructed Byju’s to hold funds from the rights issue in an escrow account until the resolution of the oppression and mismanagement plea filed by the four investors. Additionally, Byju’s was asked to consider extending the closure date of the rights issue to safeguard the petitioners’ rights.
In January, Byju’s initiated a rights issue to raise $200 million, valuing the enterprise between $220-250 million, a significant decrease from its peak valuation of $22 billion. Founder Raveendran confirmed in a February shareholder letter that the issue was fully subscribed. Sources revealed that Raveendran intends to invest $45-$46 million in the rights issue to maintain his ownership stake in the company. Byju’s is currently grappling with financial challenges and internal disputes, with some investors aiming to change the leadership and board composition.
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