Byju’s promoters rake in over $400 mn in secondary share sale since 2015

The promoters of edtech major Byju’s–founder Byju Raveendran, his wife and co-founder Divya Gokulnath, and his brother Riju Raveendran–have cumulatively earned $408.53 million from secondary transactions of their shares in the company, reveals a report from PrivateCircle Research, a private market intelligence platform.

Between 2015 and the present, Byju's promoters have participated in 40 secondary transactions, progressively decreasing their shareholding from 71.6 per cent to 21.2 per cent. During this period, Byju Raveendran sold 29,306 shares worth $3.28 million, co-founder Gokulnath sold 64,565 shares worth $29.40 million and Riju Ravindran sold 3,37,911 shares valued at $375.83 million, the report said.

Over the years, multiple investors participated in Byju’s secondary transactions including the likes of Silver Lake Partners, Blackrock, T Rowe Price, Chan Zuckerberg, Owl Ventures, Naspers, Times Internet, Lightspeed Ventures, Proxima Beta, Naspers Ventures, General Atlantic, and Alkeon.

In response to a Business Today query regarding this, the company said the promoters have reinvested the entire amount back into the business.

“The promoters of BYJU’S have reinvested the entire amounts raised from secondary sales into the business for purposes of scaling it over the years,” a company spokesperson said.

According to PrivateCircle Research, the secondary transactions were often carried out at a discounted valuation compared to the primary valuation of Byju's at the time. In the Series F round, an average discount of 53 per cent was observed in the secondary sales. Byju's promoters sold their shares within a price range of Rs 1,12,126 - Rs 1,64,000 per share, whereas the primary share price in the Series F round ranged from Rs 2,13,042 - Rs 2,37,336.

The report also states that Byju Raveendran acquired a combined total of 31,960 shares since 2012 through purchases from various sellers, including his father Ravindran Kunnaruvath, and a number of employees of the company. In addition, Divya Gokulnath acquired a total of 4,666 shares from the founders of Vidyartha, the start-up it acquired in 2017 while Riju Ravindran purchased 100 shares from Mrinal Mohit, India CEO of Byju’s.

The Bengaluru-based company has been reeling under intense pressure as a series of controversies continue to plague the company, including the resignation of its statutory auditor, Deloitte Haskins & Sells, the departure of board members, and an ongoing legal battle concerning its $1.2 billion Term Loan B (TLB).

Last week, Raveendran addressed his employees in a virtual town hall and assured them that “the situation is not as bad as what appears in the media.”

He also said, during the town hall, that his decision to invest the money he earned in secondary sales back to the company shows his believe in the potential of the opportunity and commitment to the company.

“By reinvesting the entire amount received through secondary sales back into the company, my commitment to the mission and the conviction on the potential of BYJU'S is unwavering and unshakeable,” he had said.

Raveendran also said the company is currently in discussions with investors for a new equity fundraising round, but if it doesn't materialize, he is willing to consider alternative measures such as liquidating non-core assets.