Byju’s early backers, including Lightspeed Investment Partners and Chan Zuckerberg, are looking for buyers for their partial or full stakes in the edtech company Byju’s, as they plan to book profit and make an exit, four people aware of the development informed Mint.
“These investors have been around for a long time and would be now looking to cash out. The talks are in initial stages, and final valuation is yet to be decided,” said one of the four people, who added that a deal could be struck at a 25-30% discount to the company’s last funding valuation, as per the report.
In share purchase agreements with Think & Learn Investors, founder Byju Raveendran has the right of first refusal. This clause entitles him to purchase investor shares before anyone else. Hence, even if selling investors find buyers at a particular valuation, Raveendran has the option to match or exceed that price.
In this way, Byju’s could prevent his company’s valuation from dropping.
According to Bloomberg last week, Raveendran, who holds around 25 percent in the company, intends to increase his stake to 40 percent. Several financiers and investors are in discussions with Raveendran about raising money to buy back existing investors’ shares, according to the report. If a secondary share transfer is to take place, the company’s board would need to approve it.
The company was valued at $22 billion at its last valuation. Companies raise primary capital through the issuance of new shares at a premium to secondary transactions, in which shareholders sell shares to existing or new shareholders.
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