BYJU’S Reportedly Raising $1 Billion in Fresh Funding
- ByStartupStory | May 10, 2023
BYJU’s is set to secure $1 billion in fresh funding through a combination of equity and structured instruments, with its valuation remaining unchanged at $22 billion, according to reports. Sources suggested that around $700 million would be raised through equity, with one of three Middle East-based sovereign funds in advanced discussions to lead the investment round.
The remaining $300 million will be raised through structured instruments, and the edtech giant is currently in discussions with US-based asset management firms, including Apollo Management, Oaktree Capital Management, and Davidson Kempner Capital Management.
According to The Economic Times, BYJU’S has reached out to Apollo Global Management for structured funding of $200 million to $250 million for Aakash, which it acquired in April 2021 in a cash and stock deal worth almost $1 billion.
According to sources in April, BYJU’S was in the process of raising $700 million in a funding round at a constant valuation, with existing investors taking part. Due diligence for this round had already been completed, and it was anticipated to be completed within a few weeks.
A recent report states that BYJU’S will use the $1 billion funding round, expected to close in a month, to prepay a portion of the $1.2 billion term loan B (TLB) it raised in 2021. To renegotiate its debt financing agreements, BYJU’S offered to increase the interest rate on the TLB to its lenders. Although the loan was unrated, it was the largest TLB raised by an Indian startup at the time.
BYJU’S secured $250 million in funding from its current investors such as Qatar Investment Authority in October 2022, after raising $800 million from investors like Blackrock and Sumeru Ventures in March. The edtech firm also obtained an unsecured loan of Rs 300 crore from Aakash in October 2021.
India’s most valuable startup, BYJU’S, has been facing challenges such as increasing losses, layoffs, and pending loans following the end of the edtech boom caused by the pandemic. The company has also been under scrutiny for its accounting practices, and recently, its premises were searched by the financial intelligence and investigative agency Enforcement Directorate.
In FY21, BYJU’S reported a loss of Rs 4,564.38 crore, which was higher than its FY20 loss of Rs 305.5 crore. The startup is yet to file its financials for FY2022. To address the delay, BYJU’S appointed Ajay Goel as its CFO last month.
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