Byju’s Files For Bankruptcy In Delaware
NEW DELHI, (IANS) – Byju’s Alpha unit in the US has filed for Chapter 11 bankruptcy proceedings in the US court of Delaware, listing liabilities in the range of $1 billion to $10 billion.
The ed-tech company was once valued at $22 billion in 2022, but investors said the company’s valuation had fallen to between $1 billion and $3 billion.
Alpha Inc.’s court-appointed CEO Timothy Pohl initiated Chapter 11 insolvency proceedings in a Delaware court stating that the company lacked funds to defend itself against litigation, as per court documents
Reports also surfaced that Byju’s investors which include General Atlantic, Prosus Ventures and Chan Zuckerberg Initiative are seeking to oust the top bosses of the company led by Byju Raveendran, saying they are ‘deeply concerned’ about future stability under the current leadership.
The investors are seeking an extraordinary general meeting (EGM) to adopt resolutions on outstanding governance, financial mismanagement, and compliance issues, according to earlier reports.
The board consists of founder and CEO Byju Raveendran himself, his co-founder and wife Divya Gokulnath, and his brother Riju Ravindran.
Think and Learn Private Limited (TLPL), the parent company of Byju’s, earlier this week announced to raise $200 million by way of a rights issue to all its equity shareholders, in its bid to achieve operational sustainability.
The proposed rights issuance aims to fund the ongoing capital expenditure and support general corporate purposes, the company said in a statement.
According to reports, the edtech major is going to raise funds at a drastic valuation cut of around $250 million, from its all-time high of $22 billion market valuation in 2022.
As the largest shareholders, the founders of BYJU’S have invested more than $1.1 billion in the last 18 months.