Byju’s Seeks Drastic 90% Valuation Reduction in Bid for Fresh Funding, According to Report

Beleaguered edtech giant Byju’s is reportedly seeking a substantial reduction of over 90% in its valuation to secure fresh funds, as it grapples with challenges in venture capital funding and a decreased demand for online learning post-COVID. The company, initially one of the world’s most valuable startups, aims to raise over $100 million in a new share issuance scheduled for February 2024, valuing the company at less than $2 billion. This represents a significant drop from its previous valuation of $22 billion in late 2022. Byju’s founder, Byju Raveendran, is expected to participate in the share sale to maintain his stake. The funds raised will be used to address financial issues, pay off vendors, and stabilize the business. Additionally, Byju’s is navigating the sale of its US-based digital reading platform Epic for approximately $400 million and is entangled in a legal dispute with creditors over a missed interest payment on a $1.2 billion term loan. Global investment firms, including BlackRock and Prosus, have also marked down their valuations of Byju’s. Despite disclosing improved consolidated revenue of Rs 5,298 crore in FY22, up by 118% from FY21, the company experienced a surge in net losses from Rs 4,564 crore to Rs 8,245 crore. Byju’s aims to rebuild its core business and invest in generative artificial intelligence for hyper-personalized learning after the share sale.