Embattled edtech major Byju’s rights issue to raise $200 million has been fully subscribed, Founder and CEO Byju Raveendran said in a shareholder letter.

In a letter to shareholders, seen by businesline, CEO Byju Raveendran said, “Our rights issue is fully subscribed and my gratitude to my shareholders remains strong.”

However, the founder urged some of its major investors to participate amid a rift between the edtech group and some of its largest shareholders.

The Bengaluru-headquartered startup in January announced that it would attempt to raise about $200 million through a rights issue and at a valuation cut of 99 per cent.

‘renewed mission’

“But my benchmark of success is the participation of all shareholders in the rights issue. We have built this company together and I want us all to participate in the renewed mission. Your initial investment laid the foundation for our journey and this rights issue will help preserve and build greater value for all stakeholders,” he said.

The company’s founder is set to put $45-$46 million in rights issue to preserve his shareholding in the company, said sources.

This comes ahead of an extraordinary general meeting later this week that a few of Byju’s largest investors have called, on February 23, in a bid to oust the company’s leadership and reconstitute its Board.

Board Restructuring

The edtech major is dealing with cash crunch and some of its investors seeking to oust the leadership to reconstitute the board.

In the letter, Raveendran committed to restructuring the Board and appointing two non-executive directors to the Board by the mutual consent of the founder and shareholders after the FY23 Audit, which is expected to close by the end of the quarter.

“To ensure transparency about the usage of funds raised through the rights issue, we will appoint a third-party agency to monitor the same. This agency will report to all shareholders on a quarterly basis, within 45 days from the end of the quarter, along with commentary from the Board,” he added.

Raveendran believes that as the largest shareholder of the company, it would have been in his “best interest” to price this rights issue high.

“But that would not be in the best interest of the Company... I have personally put in $1.1 billion in the company over the last two years to pay salaries and maintain operations. I view this not as an obligation, but as my Dharma and duty. I have sacrificed everything to not fail in this duty,” he added.

The company will soon launch an artificial intelligence (AI) tool, Byju’s Wiz, which will help students with the solutions and be integrated into its Geogebra’s maths engine.