The investors are currently conducting due diligence and the final approval is expected in about a week, sources said
BYJU’S is expected to raise the fresh capital at its old valuation of $22 Bn
Last week, US-based asset manager and stakeholder BlackRock nearly halved the valuation of BYJU’S on its books to $11.5 Bn
As a potential debt crisis looms, edtech decacorn BYJU’S is in talks with investors to raise a funding of $700 Mn, sources said.
The investors are currently conducting due diligence and the final approval is expected in about a week, the sources added.
However, there is no clarity on who the potential investors are. Meanwhile, the total funding amount can change and will be ascertained only after the round closes.
BYJU’S declined Inc42’s request for a comment on the matter.
Meanwhile, news agency PTI citing sources said that the edtech major expects to close a $250 Mn fundraiser soon and will raise the remaining $450 Mn in the next two weeks. The funding would be raised at the last valuation of $22 Bn.
This comes nearly five months after BYJU’S raised a $250 Mn funding round in October 2022 from existing investors in a mix of equity and debt. The development also comes amid reports that the edtech giant is in talks to raise $500 Mn from multiple investors, including private equity group TPG.
The ongoing funding winter and the slowdown in the edtech sector due to the reopening of schools and educational institutions after the pandemic has made the going tough for BYJU’S. Last week, US-based asset manager and stakeholder BlackRock nearly halved the valuation of BYJU’S on its books to $11.5 Bn. BlackRock is said to have marked down the value of its shares in BYJU’S to $2,855 per share from $4,660 in April 2022.
BYJU’S has also been looking to re-negotiate its $1.2 Bn term loan amid mounting losses. While it is yet to release its financials for the fiscal year 2021-22 (FY22), its loss soared nearly 20X year-on-year (YoY) to INR 4,588 Cr in FY21.
This has forced the startup to resort to layoffs to cut down its costs and turn profitable. As per Inc42’s layoff tracker, BYJU’S has laid off 4,000 employees since 2022 across group companies.
Such has been the mayhem that, in February, reports emerged that BYJU’S was looking at shutting down WhiteHat Jr to cut expenses. This was quickly denied by BYJU’S which said that it has no intention of winding up the vertical.
BYJU’S has also been under fire for delays in filing its financial statements. Amid this, it announced the appointment of former Vedanta Resources’ executive Ajay Goel as its chief financial officer (CFO) on Monday. He will fill the position which has been vacant for more than a year now since the departure of CFO PV Rao in December 2021.