Indian edtech giant BYJU’s is in final talks to raise $250 million at a flat valuation of $22 billion, a source told DealStreetAsia, amid pressure to put a lid on rising costs, turn profitable and repay a $1.2 billion term loan.
Last month, sources had told DealStreetAsia that BYJU’s had entered into talks to raise $500 million at a flat valuation of $22 billion from investors including TPG. DealStreetAsia could not verify whether that founding round was closed, and if the latest round is part of the same fundraising.
BYJU’s declined to comment for this report when contacted by DealStreetAsia.
The edtech company earned a $22 billion valuation in March 2022 when it raised $800 million in a round led by its founder and CEO Byju Raveendran.
Companies generally raise money at a flat valuation when they are unable to attract a higher valuation from investors, or when the company’s financial performance has not improved significantly since its previous round of funding. In some cases, a company may choose to raise money at a flat valuation in order to avoid diluting existing shareholders.
The fresh fundraising talks come even as BYJU’s is in talks to negotiate the terms of a $1.2-billion term loan, sources familiar with the matter had told DealStreetAsia in December. This may involve lower coupons and asking for more time to repay.
Earlier this week, The Economic Times reported that BYJU’s has offered to increase the rate of interest on its $1.2 billion term loan B (TLB) as part of renegotiating debt-financing arrangement. The company had declined to comment on the report.
BYJU’s is backed by marquee investors such as the Chan-Zuckerberg Initiative, Naspers, the Canada Pension Plan Investment Board (CPPIB), General Atlantic, Tencent, Sequoia Capital, Sofina, Verlinvest, IFC, Aarin Capital, Times Internet, Lightspeed Ventures, Tiger Global, and Owl Ventures.
It has been under the scanner for its accounting practices, mass layoffs, and widening losses for the past few months.
Earlier this year, BYJU’s laid off 1,200 employees, in addition to the 2,500 employees it let go six months ago.
Despite drastic cost-cutting measures including massive layoffs, BYJU’s has had to extend its timeline to become profitable at a group level to the fiscal year 2024, from its previous target of March 2023.
While BYJU’S is the most valuable Indian edtech firm, it is also the biggest loss-making unicorn in India. In FY21, BYJU’S expenses surged 2.4 times to Rs7,027 crore, while its losses ballooned 14.9 times to Rs 4,564 crore.
Since 2017, BYJU’s has completed more than 15 acquisitions, including companies in the US, UK, Austria, India and Singapore. The BYJU’s family of brands includes Disney-BYJU’S Early Learn, BYJU’S Future School, Epic!, Osmo, Tynker, Toppr and WhiteHat Jr.
Earlier this month, there were media reports that the company is considering shutting down WhiteHatJr, a loss-making coding platform it acquired two years ago for $300 million. The company has denied plans to shut down the business.