major Byju’s has raised $700 million at a flat valuation of $22 billion, involving two separate deals of equity and convertible notes, according to two sources aware of the development.
Edtech major Byju’s has raised $700 million at a flat valuation of $22 billion, involving two separate deals of equity and convertible notes, according to two sources aware of the development.
Sources said that the fresh funding round was led by two West Asia-based sovereign wealth funds and large private equity firms. A few existing investors also participated in the round.
“A few senior employees were briefed about the round on March 31, after the term sheet was signed. At least $400-500 million is reserved for debt payments, as per one of the terms of the deal,” sources said, adding that the due diligence by the investors has been done. “Byju’s initial plan was to merge multiple subsidiaries – Think and Learn – into the parent firm, but now the plan is to list only Aakash separately in India. The timeline has now been moved to 10-12 months from now,” sources said.
An email questionnaire sent to the company did not elicit response till the time of the going to the press.
The fresh funding round comes at a time when the company has been working around repayments of a large $1.2-billion term loan B (LTB) raise with a five-year tenure that it secured in November 2021. In December last year, a group of lenders that participated in the term loan offering renegotiated the terms of the debt, including faster repayment of part of the loan.
According to Tracxn data, Byju’s has raised more than $5 billion to date. Its last significant fundraise was a $250-million funding round from Qatar Investment Authority (QIA) at a flat valuation of $22 billion in November 2022 in which a few PE investors participated. In March 2022, it had raised funds worth $800 million from Sumeru Ventures, Vitruvian Partners and BlackRock.
Founder and CEO Byju Raveendran had also participated in the March fundraise round with a personal investment of $400 million. However, the funding by Sumeru and another investment firm, Oxshott Capital Partners, amounting to $300 million, reportedly did not conclude. Raveendran confirmed last month that the $300 million in funds was, in fact, withdrawn by the investors.
Byju’s has recently been in the news for multiple rounds of layoffs and for questionable accounting practices that received scrutiny from its own financial auditor. Byju’s also came under intense scrutiny from the government and the ministry of corporate affairs (MCA) after its FY21 financials were delayed by almost 18 months beyond the prescribed timeline.
The company filed its FY21 results in September 2022, reporting that its net loss rose to Rs 4,588 crore from Rs 231.69 crore in FY20. The company’s total revenues during the year saw a marginal decline of 3.32% to Rs 2,428.39 crore. The huge jump in losses during the year was due to the deferral of 40% of revenues to subsequent years, but costs not getting deferred.
Raveendran had then said losses would reduce in FY22.
In October last year, the company conducted its biggest ever layoff – 2,500 employees or 5% of its 50,000-strong workforce – across various subsidiaries, including Toppr, Meritnation, TutorVista, Scholr and HashLearn to “avoid redundancies” in roles.
The company said that these businesses, which came to it as part acquisitions, will be consolidated as one business unit. Only Aakash and Great Learning, which were acquired in 2021 and 2022, respectively, will continue to function as separate organisations.
Byju’s had said it will focus on growing overall profitability in the next few quarters. “As a mature organisation that takes its responsibility towards investors and stakeholders seriously, we aim to ensure sustainable growth alongside strong revenue growth. These measures will help us achieve profitability in the defined time frame of March 2023,” Mrinal Mohit, CEO, Byju’s India business, had then said.
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