Byju’s recently raises $700 million in new funding: Report

The edtech company Byju’s recently raises $700 million via two separate equity and convertible note deals at a valuation of $22 billion.

Two West Asian sovereign wealth funds and sizable private equity firms, according to sources, lead the new investment round. Participating in the round were a few previous investors.

On March 31, after the term sheet was signed, a few top staff members received a briefing regarding the round. According to one of the stipulations of the deal, at least $400 million to $500 million is set aside for debt payments, according to sources, who also noted that the investors have performed their due diligence. “Byju’s early strategy called for combining Think and Learn and other subsidiaries into the main company, but the current strategy calls for listing just Aakash separately in India. Now, the schedule will be in place for 10 to 12 months, according to sources.

The company has been attempting to meet the repayment terms of a significant $1.2-billion term loan B (LTB) financing with a five-year term that it secured in November 2021. A number of lenders who took part in the term loan offering renegotiated the conditions of the debt in December of the previous year, including the ability to pay back a portion of the loan more quickly.

Byju’s has raised almost $5 billion to date, according to Tracxn data. In November 2022, Qatar Investment Authority (QIA) led a $250 million investment round at a flat valuation of $22 billion, in which a small number of PE investors took part. This was the company’s most recent big fundraiser. Sumeru Ventures, Vitruvian Partners, and BlackRock contributed $800 million to its funding round in March 2022.

By investing $400 million of his own money, founder and CEO Byju Raveendran also took part in the March fundraising round. According to reports, the $300 million commitment from two new investment companies, Oxshott Capital Partners and Sumeru, failed. In a statement he released last month, Raveendran claimed that the investors had in fact withdrawn the $300 million.

Byju’s has been in the news recently for a number of layoffs as well as for questionable accounting procedures that were investigated by its own financial auditor. As a result of Byju’s FY21 financial reports being nearly 18 months behind schedule, the government and the Ministry of Corporate Affairs (MCA) also gave it close attention.

To “prevent redundancies” in employment, the company, which operates Toppr, Meritnation, TutorVista, Scholr, and HashLearn, let go 2,500 workers in October of last year, or 5% of its 50,000-person staff.

According to Byju’s, increasing overall profitability will take precedence in the next quarters. Because we are an established company that takes its responsibilities to stakeholders and investors seriously, we strive for sustainable growth in addition to quick revenue expansion. “These approaches will help us to attain profitability in the targeted time period of March 2023,” said Mrinal Mohit, CEO of Byju’s India branch.