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Byju founder launches stock offering to make peace with estranged investors | TechCrunch

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Byju Raveendran, the founder of embattled edtech group Byju’s, has made one last attempt to placate disgruntled investors. He just informed them that the board is considering a forfeited stock offering – shares that a company offers to its shareholders at a reduced price to allow them to buy more shares – to avoid dilution of their assets before validating a recent capital increase which reduced the valuation of the Indian startup by 99%.

In an email to shareholders Friday morning, a copy of which TechCrunch reviewed, Raveendran said the startup’s board was considering making the offer despite the “animosity” displayed by some of the suing investors. unjustified legal actions.

Raveendran also informed shareholders that the startup has already received more than 50% of the votes required to increase the startup’s authorized share capital to bring into effect the fully subscribed $200 million rights issue. Byju’s will hold an extraordinary general meeting on Friday, during which it will attempt to pass the resolution on the rights issue. The rights issue values ​​Byju at less than $250 million, a stunning drop from the $22 billion valuation the startup boasted in early 2022.

Prosus Ventures, Peak XV Partners and Chan Zuckerberg Initiative are among the investors who did not participate in Byju’s recent $200 million rights issue. Investors instead sought to remove Raveendran and his family from the startup and invalidate the rights issue.

“I have always built Byju’s with a spirit of equality and fairness, and it was never my intention to leave any investor behind, regardless of the size of their shareholder base,” Raveendran wrote in a Friday email. “Since the creation of this company, my vision has been to support everyone, from one stage to the next. And I always had the belief that we would overcome our challenges together.

Prosus, Peak Investors left the startup’s board and global auditing giant Deloitte dropped Byju as a client over these concerns last year.

“Even my detractors know that I have invested everything and more in this company,” Raveendran wrote on Friday. “So I hope you will see the value in continuing with Byju’s in the same spirit with which you first joined our journey.”

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