Byju’s in talks to raise up to $700 mn, valuation may cross $15 bn

The funding is expected to help Byju’s to fund its acquisitions, including the up to $700 million deal to buy Aakash Educational Services, according to sources



Peerzada Abrar  | 

Byju’s is raising about $500-700 million from new and existing investors, which would increase the Bengaluru-based edtech decacorn’s valuation to about $15 billion. This would be an increase of $3 billion from its present valuation of $12 billion attained in the previous round, according to the sources.

Byju’s is narrowing the gap to become the most valuable start-up in the country after digital payments firm Paytm, which is valued at around $16 billion.

People in the know said that Byju’s is in talks with new investors based in the US and the West Asia, including Baring Partners, B Capital, founded by Facebook co-founder Eduardo Saverin and Malaysia’s sovereign wealth fund Khazanah Nasional to raise the new funding round. It is also having conversations with existing investors such as Qatar Investment Authority, General Atlantic and Tiger Global, Naspers and Sequoia. “However existing investors may come into the picture only during the secondary sale of the shares,” said a person familiar with Byju’s fundraising plans.

The news about Byju’s fundraising was first reported by Entrackr, a platform that tracks tech companies.

Byju’s declined to comment on the development.

People in the know said the funding is expected to help Byju’s to fund its acquisitions. The firm is seeking to close the deal to acquire exam preparation firm Aakash Educational Services soon. The deal, valued at $700 million-800 million, would be the biggest in the education space once closed, said sources.

Byju’s has been on a fundraising spree since 2020. The pandemic helped it become a decacorn (a company valued at over $10 billion). The company, founded by Byju Raveendran, has raised total funding of about $2.1 billion from investors. It is also backed by investors such as the Chan Zuckerberg Initiative (CZI), founded by Facebook CEO Mark Zuckerberg and Priscilla Chan.

Besides the existing capital, the fresh fundraising of $700 million is expected to help Byju’s make other acquisitions. There is a need for the firm to justify the $12-billion valuation and scale-up revenues rapidly, according to experts.

To achieve that, the firm has taken an inorganic route where it is in talks to acquire many edtech firms in India and the global market. It was in talks to acquire smaller rivals such as Toppr in a $150 million deal and education firm Scholr, according to the sources.

Last year in August, Byju’s acquired Mumbai based ed-tech start-up, WhiteHat Jr, which teaches coding to children for $300 million. In 2019, Byju’s also bought the US-based educational gaming company, Osmo, for $120 million in a stock-and-cash deal.

The country’s $180-billion education sector has gone online to adapt to the new reality brought to the fore by coronavirus pandemic, leading to opportunities for edtech firms, including Unacademy, Vedantu, and Byju’s. Byju’s had almost doubled its revenue from Rs 1,430 crore to Rs 2,800 crore in FY20. Today, the app has over 70 million registered students and 4.5 million annual paid subscriptions. It was targeting doubling its revenues to $1 billion in the current financial year ending in March 2021.

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