The troubled Indian edtech startup byju raveendran is thinking about valuing the company at $2 billion through a rights issue for current investors, according to a person familiar with the company’s intentions. Byju’s will still see it as a positive development despite the steep 90% decline from the company’s peak valuation of $22 billion that the once-flying startup had set in July 2022.
byju raveendran was downgraded by BlackRock to a $1 billion valuation earlier this month, and Prosus, an Amsterdam-listed company, reduced the company’s valuation to less than $3 billion last November.
The creator of byju raveendran, on the other hand, has witnessed a similar rise in wealth. byju raveendran stake in the startup has collapsed, despite his estimated net worth of $3.6 billion at Byju’s peak valuation. According to Forbes, the former billionaire’s net worth has been totally destroyed when taking into consideration the money he borrowed to invest in the business while investors were providing a rescue. He is said to have pledged in December to use the 1,000 million rupees in homes owned by his family and his under-construction villa to cover employee salaries.
byju raveendran, which is regulated by the Ministry of Corporate Affairs in India, released its long-awaited financial results for the fiscal year that concluded in March 2022 earlier this week. Despite a nearly $700 million increase in revenue, the company’s bottom line suffered greatly as a result of the top-line growth. To exceed $1 billion, Byju’s net loss increased by 81%.
Aakash Educational Services, an offline test-prep company, and Great Learning, an online higher education platform, both acquired by byju raveendran during its heyday, were largely responsible for the revenue increase. Osmo, a US-based company that creates educational games, and its coding unit, White Hat Jr., were responsible for about 45% of the losses.
Since September 2022, the company has been facing delays in releasing its fiscal 2022 results due to the resignation of Deloitte, its auditor, and the subsequent resignations of “board members” who represented Peak XV Partners Prosus and the Chan Zuckerberg Initiative.
The chairman of digital consulting and investment firm 5F World, Ganesh Natarajan, says it’s unfortunate to see byju raveendran turning into a loss-ridden unicorn as valuations drop from $22 billion to $1 billion. This is a lesson for all entrepreneurs. The company still has potential for recovery, but doing so will require strong leadership.
For Forbes Asia, byju raveendran Gayatri Ganju
The troubled Indian edtech startup Byju’s is thinking about valuing the company at $2 billion through a rights issue for current investors, according to a person familiar with the company’s intentions. Byju’s will still see it as a positive development despite the steep 90% decline from the company’s peak valuation of $22 billion that the once-flying startup had set in July 2022.
BlackRock reduced byju raveendran valuation to $1 billion earlier this month, and Prosus, an Amsterdam-listed company, reduced the company’s valuation to less than $3 billion in November of last year.
The creator of Byju, on the other hand, has witnessed a similar rise in wealth. byju raveendran stake in the startup has collapsed, despite his estimated net worth of $3.6 billion at Byju’s peak valuation. According to Forbes, the former billionaire’s net worth has been totally destroyed when taking into consideration the money he borrowed to invest in the business while investors were providing a rescue. He allegedly promised to use the 1,000 million rupees that his family’s homes and the under-construction villa would provide to cover employee salaries in December.
The Ministry of Corporate Affairs, which oversees Indian businesses, released Byju’s long-awaited financial results for the fiscal year that concluded in March 2022 earlier this week. The company’s top line increased by more than double to almost $700 million, but the bottom line suffered greatly as a result. Byju’s net loss increased to over $1 billion, an 81% widening.
Aakash Educational Services, an offline test-prep company, and Great Learning, an online higher education platform, both acquired by byju raveendran during its heyday, were largely responsible for the revenue increase. Osmo, a US-based company that creates educational games, and its coding unit, White Hat Jr., were responsible for about 45% of the losses.
After Deloitte, the company’s auditor, resigned in September 2022, and board members representing Peak XV Partners Prosus and the Chan Zuckerberg Initiative also resigned, the company’s fiscal 2022 results were postponed until September 2022.
The chairman of digital consulting and investment firm 5F World, Ganesh Natarajan, says it’s unfortunate to see Byju turning into a loss-ridden unicorn as valuations drop from $22 billion to $1 billion. This is a lesson for all entrepreneurs. The company still has potential for recovery, but doing so will require strong leadership.
In order to resume its journey, Byju’s must first address a number of urgent legal matters. In addition to being involved in a legal battle with New York lenders regarding a $1.2 billion loan, it is also being investigated by the Directorate of Enforcement for possible breaches of foreign exchange laws. Finally, it is in conflict with the Board of Control for Cricket in India over potential nonpayment of sponsorship fees.
Byju’s stated in response to the forex investigation that, as confirmed by thorough due diligence carried out by respectable legal firms, it maintains and will continue to maintain complete adherence to all pertinent FEMA (Foreign Exchange Management Act) regulations. Additionally, despite Byju’s warnings, the edtech company’s new auditor, MSKA & Associates, the audit division of BDO, has not produced any proof of fraud.
The auditor stated that during the course of our audit, no fraud, either on the part of the company or by the company, was observed or reported. stated in a press release by Byju’s.
