Byju’storaise$1.5billion at $21 billion valuation

The fundraising for the country’s most valuable startup is expected to be closed within a month

MUMBAI: Online tutoring company Byju’s is in talks with several investors to raise $1-1.5 billion at a valuation of nearly $21 billion, two people aware of the development said.

India’s most valuable startup is seeking a 27% jump from the $16.5 billion valuation at which the company raised funds in June, the people said on condition of anonymity.

The fundraising is expected to be closed within a month, the people said.

Byju’s valuation has skyrocketed as the pandemic has fuelled an online learning boom as parents enrolled kids in online classes, fearful that they will miss out on classroom teaching.

In the past four months, Byju’s went on an acquisition spree, buying higher education platform Great Learning for $600 million, kids’ digital reading platform Epic for $500 million, and test preparation provider Aakash Educational Services for $1 billion in quick succession.

“Demand for online classes is increasing exponentially, which is driving the business and attracting investors. At least four new large funds are coming in, and a few existing investors, too, are keen to up their stake in Byju’s. The deal will take Byju’s beyond $20 billion,” said one of the two people. “The education space is clearly hot right now, and the company’s IPO plan is being concretized. That’s the opportunity the investors are enthused about.”

A spokesperson for Byju’s declined to comment.

China’s crackdown on forprofit online tutoring companies to reduce the cost of education for parents has also prompted investors to look at the booming Indian market.

Hedge funds are also keen to buy shares of Byju’s as they aim to reap big returns when the company goes public.

In an April interview, founder Byju Raveendran said that the company will go for an initial public offering in 18-24 months.

“Byju’s will not only become the largest startup but also the fastest and the first Indian startup to cross the $20 billion valuation mark,” said the first person.

Byju’s has more than 65 million subscribers, but the edtech startup has seen a faster growth over the past year, with at least 25 million new users signing up to use its platform after the Covid-19 pandemic-induced lockdown was announced last year in March.

“There are more than 3,500 edtech startups in India, but when the first covid-19 outbreak happened, it was a challenge to educate students in an online environment since the public mindset about education was completely physical-oriented,” said the second person.

“Marketing skills played a crucial role in helping Byju’s grab the opportunity in the online era to gain a major market share,” the person said.

With the explosive growth, Byju’s valuation has seen a meteoric rise this year.

In June, Byju’s raised $1.5 billion from UBS Group, Abu Dhabi sovereign fund ADQ, Blackstone Group, among others, at a valuation of $16.5 billion.

In April, Byju’s had raised over $1 billion from investors led by Baron Funds, Facebook co-founder Eduardo Saverin’s B Capital Group, and Us-based investment hedge fund XN Exponent Holding.

The fundraising valued the company at around $15 billion.

Last December, Byju’s raised about $1.5 billion in three tranches of Series F from investors such as Black Rock and T. Rowe Price at a valuation of $12 billion.

Some of Byju’s early-stage financiers include Lightspeed Venture Partners, Qatar Investment Authority, Owl Ventures, General Atlantic, Tiger Global, Tencent, Verlinvest and Sofina.

IN THE PAST FOUR MONTHS, BYJU’S HAS BOUGHT GREAT LEARNING FOR $600 MILLION, EPIC FOR $500 MILLION, AND AAKASH SERVICES FOR $1 BILLION IN QUICK SUCCESSION