The primary capital infusion is largely to fund Byju’s acquisition of Aakash Educational Services which is being pegged at $700-800 million in size.
Edtech major Byju’s is in discussions with a group of investors to raise around $500-600 million in a new financing round which is slated to propel its valuation to as much as $14-15 billion, three people in the know of the development said, as Indian internet startups attract a rush of capital across stages.
“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,” said a person in the know of the matter.
The primary capital infusion is largely to fund Byju’s acquisition of Aakash Educational Services which is being pegged at $700-800 million in size, sources said. With 70% of the Aakash transaction being in cash and only 30% through a share swap, Byju’s is shoring up funds to close the deal in a few weeks from now, said another person close to the developments. The company is also in the final stages of buying out Mumbai-based Toppr, which will involve about $50 million in cash with the rest of it being stock.
“ The latest fundraise is largely primary in nature as Byju’s would utilise the capital to close these acquisitions. It is also eyeing some buyouts in the US. The proceeds from the fundraise will also be used to expand globally..,” said a person cited earlier in the report.
Emailed queries sent to Byju’s and B Capital did not elicit a response till going to press on Thursday.
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 in the middle of the pandemic as more kids began using online education.
Byju’s has said that the pandemic drove strong growth for its business, with 20 million new users signing up to use the platform four months after 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 clocked Rs 2,800 crore in the year that ended March 2020. By July last year, the company said that it had achieved a revenue run rate of Rs 6,000 crore, just a little short of it being able to crack $1 billion revenue mark in FY21.
It’s targeting doubling its revenues to $1 billion in the current financial year ending in March 2021.