SUMMARY
Besides TPG, two Middle-Eastern sovereign wealth funds have begun due diligence into BYJU’S as part of the fundraise
The edtech firm is looking to raise the funds at its current valuation of $222 Bn; Deliberations are currently underway and it is not clear if the deal would materialise
Earlier, it was reported that BYJU’S, which has been bogged down by debt, was renegotiating its $1.2 Bn term loan
Edtech decacorn BYJU’S is reportedly in talks to raise over $500 Mn in funding from multiple investors, including private equity group TPG, that can help it avoid potential debt issues.
People familiar with the development told Bloomberg that several investment firms, including two Middle-Eastern sovereign wealth funds, have begun due diligence into BYJU’S as part of the fundraise.
The report said that the edtech major is looking to raise fresh funds at its current valuation of $22 Bn. Deliberations are currently underway and it is not clear if the deal would materialise.
The report comes at a time when BYJU’S has grabbed the headlines for all the wrong reasons. Earlier this month, Inc42 reported that the edtech giant would sack hundreds of employees over their poor work performance. Besides, the company has also been bogged down by debt, which has seen BYJU’S attempting to renegotiate its $1.2 Bn term loan.
Founded in 2006 by Byju Raveendran and Divya Gokulnath, the erstwhile management coaching institute grew on the back of pandemic-induced growth to become the country’s most valued edtech firm.
While the company grew at a break-neck speed during the pandemic, the reopening of schools and educational institutes hit it hard. The year 2021 brought the startup’s plans to a screeching halt as issues began to crop up at BYJU’S.
At the outset, the startup was criticised for delays in filing its FY21 financial statements, and was then panned for mounting losses and eventual layoffs.
Last year, BYJU’s laid off more than 4,000 employees across its multiple subsidiaries.
Meanwhile, the company has more or less put its listing plans on hold. Besides, its cofounder and chief executive officer (CEO) Raveendran has been looking to raise funds to increase his stake in the startup to 40% from the current 25%.
Some reports in November last year also said that BYJU’S was negotiating with TPG to raise capital in the range of $250 Mn-$300 Mn.
While BYJU’S raised $250 Mn in a mix of equity and debt from existing investors in October 2022, the edtech major also picked up $800 Mn in strategic funding from Raveendran, Sumeru Ventures, Vitruvian Partners, and BlackRock in March last year.
The CEO, in an internal mail, recently said that the startup plans to hire another 10,000 teachers in 2023 and would add another 250 physical coaching centres through Aakash BYJU’S. While he has time and again blamed macroeconomic pressures for the plummeting fortunes of the company, BYJU’S still appears to be far from profitability.
