Byju’s, India’s leading Edtech startup, is facing a massive valuation cut of 99% as it seeks to raise $200 million from existing shareholders in a rights issue. The company, which was valued at $22 billion in 2022, is now struggling to survive amid multiple challenges and cash crunch.

The rights issue, which proposes a share price of $5, could bring down the company’s post-money valuation to around $225 million, including the primary capital raised in the current round. This is a huge contrast to its peak valuation, which made it one of the most valuable startups in the world.

Byju Raveendran, the founder and CEO of Byju’s, has informed the shareholders that the founders have invested over $1.1 billion of their own money in the past 18 months to keep the business running. He also expressed confidence that Byju’s will achieve operational profitability in the next quarter.

Byju’s, known for its aggressive acquisition spree, has spent $2.5 billion on buying over a dozen companies in 2021 and 2022. However, the company has failed to secure new funding for almost a year, due to unfavorable market conditions and internal issues, such as the departure of senior executives, board members and auditors.

The company’s plans for an IPO and a $1 billion funding round have also been stalled. Moreover, Byju’s is facing legal troubles, as some of its lenders have filed an insolvency petition with the NCLT Bengaluru, seeking to recover $1.2 billion of Term Loan B debt. Byju’s has denied these allegations, saying that they are baseless and premature, and that the lenders’ actions are under dispute in various courts, including the New York Supreme Court."