In a series of secondary transactions from 2015, the promoters of edtech firmhave collectively sold shares amounting to $408.53 million, according to an analysis conducted by PrivateCircle Research, a private market intelligence platform.
Byju Raveendran, the founder and CEO of BYJU’S; Divya Gokulnath, his wife and co-founder; and Riju Ravindran, his brother and a director at BYJU’S, have been involved in these transactions.
Since 2015, Raveendran has individually sold 29,306 shares, resulting in proceeds of $3.28 million. Gokulnath, on the other hand, has sold 64,565 shares, totalling $29.40 million, while Ravindran has sold 3,37,911 shares, generating $375.83 million, according to PrivateCircle.
It is to be noted that these secondary deals were often executed at discounted valuations compared to the primary valuation of the company at the time.
For instance, during BYJU’S Series F round, an average discount of 53% was observed in the secondary sales. In this round, the promoters sold their shares in the price range of Rs 1,12,126 to Rs 1,64,000 per share, while the Series F primary share price ranged from Rs 2,13,042 to Rs 2,37,336, as per PrivateCircle.
The market intelligence platform said that it conducted a comprehensive analysis, utilising public data sources to compile the findings. In cases where the secondary share price was unavailable, the closest primary share price was used as a reference point.
Throughout this period, a multitude of investors have participated in BYJU’S secondary transactions, including Silver Lake Partners, Blackrock, T Rowe Price, Chan Zuckerberg, Owl Ventures, Naspers, Times Internet, Lightspeed Ventures, Proxima Beta, Naspers Ventures, General Atlantic, and Alkeon.
Purchases and shareholding
It is worth noting that Raveendran has made several purchases of shares, totalling 31,960, from various sellers, including his father Ravindran Kunnaruvath and employees Arunangshu Bhakta, Brijesh Maheshbhai Patel, Smit Rajanikant Patel, Unique Jain, and Pravin Prakash, since 2012.
Similarly, Gokulnath acquired a total of 4,666 shares from the founders of Vidyartha, Navin Balan and Priya Mohan, after BYJU acquired the company in 2017. Riju Ravindran purchased 100 shares from BYJU’S COO Mrinal Mohit. However, the value of these secondary purchases could not be ascertained.
During a recent shareholders call, BYJU’S CEO disclosed his significant personal investments in the company, amounting to $400 million in the parent company, $250 million for the Aakash acquisition, and an additional $250 million through pledged secondary shares in the last funding round. Raveendran also revealed that all the proceeds from the secondary share sales have been reinvested in the company at a valuation of $22 billion.
Notably, the promoters’ shareholding has gradually decreased since 2016, starting from 71.6% and declining to 54.7% between 2015 and 2016. Over the years, their stake diminished further to 34.7% in 2019. Currently, the promoters collectively hold a 21% stake in the edtech company, with Raveendran owning 15.90%, Gokulnath holding 3.32%, and Ravindran possessing 1.99%.
These findings, which reveal the evolving ownership structure of the company, come at a time when BYJU’S is facing multiple challenges, including the departure of Deloitte as its auditor, the resignation of three prominent board members, conflicts with creditors over a $1.2-billion term loan B, and delays in filing financial statements.