Indian edtech giant, Byju’s, is planning to raise $700 million in a flat $22 billion valuation. The financing, which is composed of two separate deals of equity and convertible notes, is expected to be completed in the coming weeks. This new funding serves as a major relief for Byju’s as it was experiencing a liquidity crunch. According to reports, this fundraiser was led by two West Asia-based sovereign wealth funds and large private equity firms, with other existing investors also participating.
However, in order to reorganize its debt-financing arrangements, Byju’s had to renegotiate its terms with creditors and accept an interest rate increase for its $1.2 billion term loan B. As a result, Byju’s has appointed a new CFO Ajay Goel, a Vedanta executive, to comply with the renegotiation.
Byju’s has been struggling since the start of 2021. It faced accounting irregularities, alleged mis-selling of courses, and layoffs due to the sluggish demand of online learning services. In response, they have been trying to raise at least $250 million of fresh funding. Talks with private equity firm TPG were made as well, although Byju’s is attempting to maintain its current $22 billion valuation amidst the current macroeconomic headwinds.
Additionally, Byju’s is rumored to be considering listing their tutoring services unit, Aakash Educational Services, which was acquired for $1 billion in April 2021, onto the Indian stock exchanges with a target $3-4 billion valuation. This talks goes hand in hand with the exploratory merger talks of the company with their biggest competitor, Unacademy.
Founded in 2011 by Raveendran and his wife Divya Gokulnath, Byju’s has raised more than $5 billion in funding from investors up to date. It has recently been named as India’s most valued startup.
Raveendran, former teacher and husband of Divya Gokulnath, is the founder and CEO of Byju’s. Since he began his educational venture in 2011, Raveendran has consistently developed the vision behind Byju’s and at present, the company has become India’s most valued startup. Due to his leadership and sound decision-making skills, Byju’s has successfully managed to sustain the business amidst turbulent times and is set to receive funding of $700 million at a flat $22 billion valuation.
Ajay Goel is the new Chief Financial Officer (CFO) of Byju’s. He had a brilliant tenure at Vedanta as Executive Director, during which he was handling business strategies and financial analysis for their various businesses. Ajay’s addition to the board comes after more than a year of the company searching for a new CFO. His entrance signifies how Byju’s is maneuvering itself to be able to adjust to the debt repayment agreement, a step forward for the edtech giant.