Can you tell me about the latest fund raising round done by Byju’s?
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Answer
Byju’s, which is India’s largest and most valuable EdTech (education technology) company, has just raised $800 million or approximately Rs.6,000 crore in its latest round of funding. Interestingly, nearly $400 million out of this fund raising came from the founder Byju Ravindra. The other PE funds that participated in this round of funding include Sumeru Ventures, Vitruvian Partners and BlackRock.
The latest round of funding values Byju’s at $22 billion compared to $18 billion in its previous round of funding. Byju’s is one of the big ticket digital and edtech plays in India which plans to tap the IPO market. However, for now, Byju’s is just biding time due to the unfavourable conditions in the IPO market. With this latest participation by Byju Ravindran, his stake in Byju’s has gone up to 25%.
While an Indian IPO is on the anvil, Byju’s has been spreading its bets. It is also negotiating with Churchill Capital to raise $4 billion and go public through the special-purpose acquisition company (SPAC) route. SPACs are like shell companies created just to facilitate the listing and fund raising of a large company. The valuation that Byju’s is seeking in the SPAC round is about $48 billion; or about twice its current funding round valuation.
Byju’s became India's most valuable unicorn (rather decacorn) in June 2021 when it surpassed the $16 billion valuation of Paytm. However, with the sharp correction in the stock price, Paytm valuation is now down to below $7 billion. Byju’s has been one of the big beneficiaries of the pandemic which saw a major shift from offline learning to online learning. This is similar to Paytm benefitting immensely from the currency demonetization.
Byju’s has been one of the most aggressive inorganic growth engines in the edtech space. It currently boasts of over 150 million learners on its platform with an enviable annual renewal rate of 86%. Currently, the US and India are fairly large markets for Byju’s ad it may be looking at a primary listing in the US via the SPAC route and a secondary listing in India. For FY23, Byju’s targets to hit total revenues of $3 billion or nearly Rs.23,000 crore.
Since Byju’s was formed more than 10 years ago, the company has raised close to $4.5 billion through a mix of equity and debt from PE funds to bankroll its growth plans. There has been no shortage of interested financers in the case of Byju’s with its aggressive growth model. Its smaller competitors include Simplilearn, Unacademy, UpGrad and Vedantu. In the last one year alone, Byju’s spent over $2 billion to buy 9 companies in India and the US.