Byju’s has raised $250 million in new funding and is poised to raise another $700 million, two people familiar with the case told TechCrunch, as the Indian edtech giant builds its war chest ahead of its highly anticipated IPO. its subsidiary Aakash.
New York-based investment firm Davidson Kempner has invested $250 million in Byju’s through structured instruments, the people said, asking for anonymity because the information is not public.
The Bengaluru-headquartered startup, India’s most valuable, is rounding up the rest of its capital from a sovereign fund, the people said. That capital, expected to arrive in two weeks, will come into the startup as part of a convertible bond capping the valuation at $22 billion.
Byju’s has maintained its $22 billion valuation over the past year, even as numerous high-profile startups worldwide have undergone severe corrections in their value.
Davidson Kempner declined to comment, while Byju’s did not immediately respond. TechCrunch was unable to identify the sovereign fund. Indian news channel Moneycontrol earlier reported about Byju’s plans for new financing.
The major round of funding in Byju’s comes as India’s startup ecosystem is reeling from a funding crisis amid a weakening global economy.
Byju’s is in advanced discussions with bankers including Citi and Goldman Sachs to go ahead with the IPO of Aakash, a physical tutor chain it acquired for nearly $1 billion two years ago, TechCrunch previously reported.
Byju’s has received approval from the board of directors to proceed with Aakash’s IPO, and is preparing to file the paperwork.
The start-up, which prepares students for undergraduate and graduate level courses and has expanded in recent years to serve all school students, has amassed 150 million users using the learning app, while hundreds of thousands of students are using the bricks and mortar centers.
Byju’s, like many other edtechs, benefited from the lockdown as more parents explored digital supplements to further their children’s education. The startup has spent more than $2.5 billion in the past two and a half years acquiring startups globally as the Indian company expanded and broadened its offerings in several international markets, Prosus Ventures, a financier of Byju’s, revealed last year in a request.
The startup generated gross sales of $1.258 billion (unaudited) in the financial year ended last March. Between April and July, the startup posted $570 million in revenue, it said. Byju’s counts Prosus Ventures, Chan Zuckerberg Initiative, Sequoia Capital India, Silver Lake, Owl Ventures, UBS and Blackrock among its backers and has raised more than $6 billion to date.