Byju’s in discussions with B Capital, others to raise $500-600 million
Edtech leader Byju’s is in discussions with a group of investors to raise about $500-600 million in a new financing round which is believed to drive its valuation to as much as $14-15 billion, three people aware of the development said, as Indian internet startups draw a rush of capital across stages.
A person familiar with the matter said, “B Capital, founded by Facebook co-founder Eduardo Saverin is among the investors which are likely to come on board. Some US investors and existing backers of the company will also participate in the new round.”
The first capital infusion is mainly to fund Byju’s acquisition of Aakash Educational Services which is being valued at $700-800 million in size, sources said. With 70% of the Aakash transaction occurring in cash and only 30% via a share swap, Byju’s is bolstering up funds to close the deal in a few weeks from now, said another person in the know of the developments. The company is also in the final stages of buying out Mumbai-based Toppr, which will comprise about $50 million in cash with the rest of it being stock.
“ The latest fundraising is mostly primary in nature as Byju’s would use the capital to close these acquisitions. It is also eyeing some buyouts in the US. The proceeds from the fundraising will also be used to expand globally,” said a person mentioned earlier in the report.
Byju’s has been on a fundraising and acquisition spree over the past year. The Bengaluru-based company was last valued at about $12 billion in November last year when T Rowe Price, Blackrock among others joined its shareholder list. It acquired WhiteHat Jr, a coding platform for young kids for $350 million last year amid the pandemic as more kids started using online education.
Byju’s has stated that the pandemic induced strong growth for its business, with 20 million new users signing up to use the platform four months following the Covid-19 induced lockdowns. It said, in contrast, it had taken the company four years to add the first 40 million users. In terms of revenue, the company said that it had recorded Rs 2,800 crore in the year that ended March 2020. By July last year, the company said that it had reached a revenue run rate of Rs 6,000 crore, just a little short of it being able to crack the $1 billion revenue mark in FY21.
The company is planning to double its revenues to $1 billion in the current financial year ending in March 2021.
Byju’s is also hiring professionals for job profiles across several departments like Academics and Content, Business Development Associates, Media, Brand Marketing and Communications, Tech, Finance, Human Resources, Mentoring, Digital Marketing, Customer Support, and Operations.