Byju’s, the world’s many edtech that is valuable, has cut its valuation ask by 99% in a rights issue it launched Monday as the Indian firm works to address its working capital needs. The startup is looking to raise $200 million in the rights issue, a capital it said is “essential to prevent any value that is further.”

The startup, once India’s most effective, is resetting its valuation to “next to nothing” within the legal rights problem, where all investors that are existing an opportunity to participate, according to a source familiar with the matter. If Byju’s succeeds in raising $200 million, the post-money valuation of the startup will be in the range of $220 million to $250 million, a 99% drop from the $22 billion value that the startup had attained in 2022, according to the source, who requested anonymity sharing information that is nonpublic

Byju’s founder Byju Raveendran informed investors in a letter Monday he along with other creators associated with the edtech team have actually spent $1.1 billion to the startup that is bengaluru-headquartered the last 18 months and seek continued support from the investors to keep the business afloat. “We have made immense sacrifices that are personal the benefit associated with the business. We’ve invested our life creating this provider and they are fervent believers with its mission,” Raveendran composed when you look at the page, seen by For Millionaires.

The liberties issue comes as Byju’s seems to secure money amid a funding crunch that is severe. The startup, which spent $2.5 billion acquiring more than a dozen firm in 2021 and 2022, has raised more than $5 billion in equity and debt from backers Peak that is including XV Lightspeed, Chan Zuckerberg Initiative, BlackRock, UBS, Prosus Ventures and B Capital. Byju’s stated in a statement we have cut our burn and worked to become a lean organization, razor-focused on execution that it expects the rights issue to close in 30 days.

“It has been 21 months since our last external capital raise, during which. The board believes it is imperative that the company raises capital in order to create a glidepath to deliver shareholder that is strong,” Raveendran typed when you look at the letter.

Byju’s isn’t the just high-profile Indian startup that includes struggled to improve money in the past few years. On the web drugstore startup PharmEasy slashed its valuation by over 90% to below $600 million in a rights problem year that is last. The startup had raised over $1.5 billion in debt and equity ahead of the legal rights problem.

Byju’s is chasing after for brand new capital for pretty much a-year. The startup was at last phases to boost about $1 billion year that is last but the talks derailed after the auditor Deloitte and three key board members quit the startup. Instead, Byju’s ended up raising less than $150 million in that round from Davidson Kempner and had to repay the investor the full amount that is committed making a technical standard in a different $1.2 billion term loan B.

Byju’s had been planning going general public in early 2022 through a SPAC offer that could have respected the business at as much as $40 billion. Nonetheless, Russia’s intrusion of Ukraine in February delivered areas downward, pushing Byju’s to place its IPO programs on hold, relating to a source knowledgeable about the situation. As marketplace problems worsened, so also performed the continuing company outlook for Byju’s.(*)