Byju’s in Discussions with Sovereign Funds and TPG to Secure $500 Million in Funding
- ByStartupStory | February 17, 2023
According to a report from Bloomberg on Thursday, Byju’s, the leading edtech company, has engaged in discussions with investors, including private equity firm TPG, to secure over $500 million in funding to avoid potential debt problems.
As per sources familiar with the matter, Byju’s discussions with investors, including TPG, to raise more than $500 million are ongoing, and it remains unclear whether the investors will finalize the deal. The report also stated that TPG, along with two sovereign wealth funds from the Middle East, has initiated due diligence on Byju’s amid the funding discussions. In addition, the company is reportedly in talks with creditors to restructure an agreement governing a $1.2 billion loan that’s in breach of covenants due to significant losses and cost reduction goals.
Byju’s, led by founder Byju Raveendran and valued at approximately $22 billion, is aiming to maintain its current valuation. The company reportedly revised its revenue from operations to Rs 2,280 crore despite incurring substantial losses of Rs 4,588 crore, a significant increase from Rs 262 crore in the prior fiscal year. This represented a 48% decrease from the expected revenue, which was primarily due to changes in the business model resulting from the impact of the Covid-19 pandemic, according to Raveendran.
Byju’s, a startup headquartered in Bengaluru and established in 2015, reportedly abandoned its plans for an initial public offering in the past year due to a slump in global markets.
As per reports, the edtech firm has recently secured $250 million in funding from its current investors, with Qatar Investment Authority (QIA) leading the round with over $100 million. The funding round allegedly involved existing investors of Byju’s selling secondary shares in the company.
Byju’s, the edtech firm, has not disclosed the investors’ names or the funding round’s valuation. However, insiders suggest that the funds were utilized to pay off outstanding debts owed to Blackstone after the Aakash Institute’s acquisition. To become profitable by March 2022, the company had announced plans in October 2020 to dismiss 2,500 employees or 5% of its workforce.
In June 2020, the firm had already laid off 600 jobs. Recently, Byju’s terminated 1,000 employees, including senior roles, in verticals such as strategy, technology, and product.
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