Byju Raveendran To Raise Funding To Increase His Stake To 40% In BYJU’S

Edtech giant BYJU’S founder and CEO Byju Raveendran is reportedly in talks to raise funds to increase his stake in the startup to as high as 40%.

As per a Bloomberg report, Raveendran would use the fresh funds to buy back as much as 15% of the firm by using his shares as collateral. Raveendran has about a 25% stake in BYJU’S as of now.

Last year also Raveendran increased his stake in BYJU’S by participating in a $800 Mn strategic funding round which he co-led along with Sumeru Ventures, Vitruvian Partners, and BlackRock. The founder invested $400 Mn in the startup then to increase his stake to 25%.

In November last year, there were reports that BYJU’S was in discussions with private equity group TPG to raise funding of $250 Mn-$300 Mn. The edtech startup raised $49 Mn from its Singapore-based parent entity Byju’s Holdings 1 Pte Ltd in October. 

While BYJU’S was valued at $22 Bn after its last funding round, the buyback might take place at a lower valuation, people aware of the matter told the publication. They also said that discussions on the funding with shareholders and financiers are still in the early stages and the talks may even fall apart. 

The year 2022 was a difficult one for BYJU’S with questions being raised on its corporate governance, accounting and sales practices, business strategies, among others. Besides, it was also hit by the slowdown in the edtech space following opening of schools and educational institutions after nearly two years of disruptions due to the Covid-19 pandemic.

After months of delay and postponements, BYJU’S reported its financial numbers for FY21 in September last year. The edtech startup’s loss widened a whopping 1,880% to INR 4,588 Cr in FY21 as against a loss of INR 231.69 Cr in FY20, raising further questions on its business. 

To cut down expenses, the edtech decacorn resorted to layoffs, like its peers Vedantu and Unacademy, and several other smaller edtech startups. In October last year, it announced a mass layoff of around 2,500 employees, constituting 5% of its workforce across product, content, media, and technology teams. 

Besides, BYJU’S owned WhiteHat Jr also laid off a total of 1,000 employees in 2022, as per Inc42’s layoff tracker, to control cash burn.

Meanwhile, Raveendran in a recent internal email told BYJU’S employees that the startup is planning to hire another 10,000 teachers in 2023 in an attempt to scale its offerings in the offline space.

The 2015-founded edtech startup is also planning to go public soon. Raveendran recently told Inc42 that BYJU’S would be in a position by the end of FY23 where the company, along with its subsidiaries Aakash and Great Learning, would start becoming profitable on a standalone basis.