'Head bloody but unbowed': What Byju's founder said in letter to shareholders

The board of Think and Learn Pvt Ltd, the parent company of Byju's, approved a rights issue to raise $200 million from existing investors, starting on January 29 and remaining valid for the next 30 days, according to sources. The issue will happen at a post-money valuation of $225 million, which is 99 percent lower than the company's last funding round which happened at a valuation of $22 billion, the sources said.

According to people familiar with the developments, the company expects most existing investors, including founder Raveendran, to participate in the round. The subscription price has been kept at minimum so that all existing investors can participate and benefit.

Here’s the full text of Byju Raveendran’s letter to shareholders on January 29, informing them of a rights issue:

Dear Shareholders,

The past few months have been tough on our Company as it faces challenges few companies ever have. While a lot has changed in terms of the macro environment, what remains unchanged is the resolve and belief we have in the mission of the Company. In these uncertain times, we have not shied away from taking several tough decisions in the best interest of the Company, and we will continue to do so in the coming months.

It has been 21 months since our last external capital raise, during which we have cut our burn and worked to become a lean organization, razor-focused on execution. The Board believes it is imperative that the Company raises capital in order to create a glidepath to deliver strong shareholder value. This capital raise is essential to prevent any further value impairment and to equip the company with necessary resources to deliver on its mission.

Our gratitude for your role in our journey remains strong. As we explore all possible avenues, we would like to keep our shareholders apprised of our thought process. We believe an expeditious capital raise will provide the Company with the resources it needs to rebuild and scale. This shall be used for the continuation of business operations, to manage obligations and to make the company more sustainable.

We have decided to raise capital using Right Issue mechanism, which will offer all our existing shareholders the opportunity to participate in this proposed capital raise, to the extent of their shareholding and beyond.

We know that you have the best interests of the Company in mind and trust that you shall act in good faith to support the Company through this period. For us, protecting Shareholder interest against permanent impairment is of utmost importance, and has underscored our decisions. We will reach out to you with additional details and actions as may be required.

As you know, we as the Founders have infused over USD 1.1 bn into the Company over the past 18 months, as a testament to the steadfast and continuous faith in the business and its mission. We have made immense personal sacrifices for the sake of the Company. We have spent our lives building this company and are fervent believers in its mission. Our enthusiasm and zeal continue unabated. As we prepare to face any challenge in the future, we draw inspiration from these lines in Invictus by William Ernest Henley:

"In the fell clutch of circumstance I have not winced nor cried aloud. Under the bludgeonings of chance My head is bloody, but unbowed."

Yours sincerely, Byju Raveendran