Continuing its fundraising and acquisition binge the primary motive of the capital this time will be to fund the acquisition of Aakash Educational Services, which is estimated to be worth $700-800 million.
According to three people familiar with the situation, edtech giant Byju’s is in talks with a group of investors to raise $500-600 million in a new funding round, which could boost its valuation to as much as $14-15 billion, as Indian internet startups attract a flood of capital at all 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.
According to sources, the primary capital infusion will be used to fund Byju’s acquisition of Aakash Educational Services, which is estimated to be worth $700-800 million. Byju’s is shoring up funds to close the Aakash transaction in a few weeks, according to another person familiar with the developments, with 70% of the transaction being in cash and just 30% via a share swap. The company is also nearing the end of its acquisition of Mumbai-based Toppr, which will cost about $50 million in cash and the rest in 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.
Over the last year, Byju’s has been on a fundraising and acquisition binge. The Bengaluru-based firm was last valued at around $12 billion in November of last year, when T Rowe Price and Blackrock, among others, became shareholders. It paid $350 million for WhiteHat Jr, a coding platform for young children, in the midst of the pandemic last year, as more children began to use online education.
According to Byju’s, 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. According to the company, it took four years to add the first 40 million users. In terms of revenue, the company reported Rs 2,800 crore in the fiscal year ending March 2020. By July of last year, the company announced that it had achieved a revenue run rate of Rs 6,000 crore, falling just short of the $1 billion revenue mark in FY21.
It plans to more than double its revenue to $1 billion in the current fiscal year, which ends in March 2021.
Source: Business World
