BYJU’S In Talks With TPG To Raise $250-$300 Mn Funding

Edtech unicorn BYJU’s is reportedly in discussions with private equity (PE) group TPG to raise funding of $250-$300 Mn.

Last month, the edtech major secured $250 Mn from its existing investors Qatar Investment Authority (QIA) and Tiger Global. Recently, BYJU’S also secured a loan of INR 300 Cr from its subsidiary Aakash Educational Services Limited (AESL) at an interest rate of 7.5% per year.

The latest funding round might be a part of a bigger round worth $400-500 Mn which the edtech startup is looking to raise through convertible instruments, the report said.

Citing sources, the report said that TPG is one of the several investors the edtech giant is currently in talks with and the initial rounds of due diligence are already underway.

However, the discussions are still at an early-stage discussion and may not necessarily materialise into a deal. If the deal materialises, it would likely be a structured one with a minimum guarantee on returns. 

According to several reports, the previous round with QIA was also on similar terms.

Speaking of valuation, the report said that the discussions are happening at BYJU’S last valuation of $22 Bn. TPG has been in discussions with the edtech major for a while, but the latest round with QIA has reportedly increased interest at the PE firm.

BYJU’S is reaching out to investors with two options, according to the aforementioned report. The investors can either choose to invest at a valuation of $22 Bn or opt for a convertible pre-IPO instrument at a 20% discount to the floor price of $22 Bn and a ceiling of $35 Bn.

The edtech major is among India’s most valuable startups, having raised more than $6 Bn from over 70 investors. Interestingly, even as BYJU’S is looking to raise more funds, it has been unable to close the $800 Mn funding round it announced in March 2022 as some investors pulled out citing adverse global macroeconomic conditions.

The decacorn has come under the limelight for all the wrong reasons in the past two months. In the FY21 results posted in September 2022, 18 months after the financial year ended, BYJU’S reported a nearly 20X widening of its loss to INR 4,588 Cr.

A month later, the edtech unicorn announced it will fire 2,500 employees as part of a major restructuring to consolidate its various acquisitions and businesses and turn profitable by the end of FY23.