According to two sources familiar with the development, Edtech behemoth Byju’s has raised $700 million at a flat valuation of $22 billion through two separate equity and convertible note deals.
According to sources, the new funding round was led by two West Asian sovereign wealth funds and large private equity firms. A few existing investors also joined the roun
“On March 31, after the term sheet was signed, a few senior employees were briefed about the round.” According to one of the terms of the deal, at least $400-500 million is set aside for debt payments,” sources said, adding that the investors have completed their due diligence. “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 received no response until the story was published.
The new funding round comes as the company works to repay a large $1.2-billion term loan B (LTB) raise with a five-year term that it secured in November 2021. In December of last year, a group of lenders who took part in the term loan offering renegotiated the debt terms, including faster repayment of a portion 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.
Byju Raveendran, the company’s founder and CEO, also contributed $400 million to the March fundraise round. However, Sumeru and another investment firm, Oxshott Capital Partners, reportedly did not complete the $300 million funding. Last month, Raveendran confirmed that the $300 million in funds had been withdrawn by the investors.
Byju’s has recently made headlines for multiple rounds of layoffs as well as questionable accounting practises that were investigated by its own financial auditor. Byju’s was also scrutinised by the government and the Ministry of Corporate Affairs (MCA) after its FY21 financials were released nearly 18 months later than expected.
The company reported its FY21 results in September 2022, reporting that its net loss increased to Rs 4,588 crore from Rs 231.69 crore in FY20. The company’s total revenues decreased by 3.32% year on year to Rs 2,428.39 crore. The huge increase in losses during the year was due to the deferral of 40% of revenues to subsequent years, but costs were not deferred.
Raveendran had previously stated that losses would be reduced in FY22.
To “avoid redundancies” in roles, the company laid off 2,500 employees, or 5% of its 50,000-strong workforce, in October last year across various subsidiaries, including Toppr, Meritnation, TutorVista, Scholr, and HashLearn.
The company stated that these businesses, which were acquired in pieces, will be consolidated into a single business unit. Only Aakash and Great Learning, which were acquired in 2021 and 2022, will continue to operate as separate entities.
Byju’s has stated that it will focus on increasing overall profitability in the coming quarters. “As a mature organisation that takes its responsibility to investors and stakeholders seriously, we aim to achieve both sustainable and 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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