Byju’s looks to raise over Rs 5,500 cr to avail loans
In need of immediate funds, edtech major Byju’s -- the largest Indian startup, is planning to raise at least Rs. 5,547 crore via private placement as the company looks to secure funds for its working capital and acquisition plans, amid a global slowdown in the technology sector. The edtech startup has recently fired some 500-odd employees. Post that, last week, the board of directors and the shareholders of Byju’s met and decided to raise as much funds as possible through issuance of convertible shares.
At least three entities have been shortlisted by Byju’s which will together bring in Rs. 5,547 crore in the latest private placement plan. Mint has reviewed a copy of the board and the shareholders‘ resolution.
“Byju’s board feels that the startup needs immediate funding to meet its working capital needs and serve its growth strategy, including planned acquisition of more edtech startups globally,” said a person directly aware of developments at Byju’s board level.
On 29 June the shareholders of Byju’s approved the edtech’s plan to raise at least Rs. 5,547 crore through a private placement, entailing a fresh issuance of convertible preference shares.
As per the plan, Byju’s Investments Pte. Ltd, an entity controlled by the company’s founder, will invest Rs. 3,200 crore, while the rest will come from two investment firms
Separately, Think & Learn Pvt Ltd. (the name with which Byju’s is registered in India) is in talks with Bank of Baroda among other lenders to avail a credit line of around $500 million according to two persons familiar with the ongoing talks.
“For this investment, Byju’s Investments may rope in lenders and other external creditors,” said a person directly familiar with the developments at Byju’s.
So far, during the year, Byju’s has alloted preference shares to at least 7 entities. But this one is the largest capital raising plan by Byju’s, which is actively scouting for funds and has recently issued pink slips to at least 500 employees.
Byju’s is looking to invest $1 billion to acquire US- based ed-tech firm 2U, as per some media reports.