Edtech firm Byju’s, headed for an IPO, raised around $ 800 million in a funding round led by its founder and CEO Byju Raveendran on March 11, 2022. The amount contributes to half of the total amount.
The Edtech firm, in a statement, said that Byju Raveendran is also a part of this fund-raise and has also made a personal investment of $ 400 million. With this, Raveendra’s stake in the firm has increased to 25 percent from 23 percent.
Raveendran said, “We continue to witness accelerated growth in India and international markets through both organic and inorganic routes.” He further reiterated that their sustained focus is on achieving long-term goals around creating life-long value for learners.
According to people familiar with the matter, partners and BlackRock also participated in this round, taking the Bengaluru-based company’s valuation to about $22 billion from $18 billion earlier.
Byju’s CEO is seeking a loan to boost his commitment
According to people familiar with the development after the round, Byju Raveendran is in talks with various international and domestic banks to raise $400 million as a loan.
Sources privy to the matter said that this move is part of the company’s strategy to show the founder’s confidence in the firm as he is leading the round and help shore up investor interest when the valuations are under stress globally.
Reportedly, Byju’s has over 150 million learners on its platform. Their annual renewal rate is at around 86 percent. The company’s CEO added that India’s Edtech sector could create global champions by solving the trilemma of cost, quality, and scale.
Founded in 2011 by Byju Raveendran and Divya Gokulnath, the company is an Indian multinational educational technology company.
“Raveendran is in discussion with various international and domestic banks to raise $400 million as a loan against shares. This may help him to shore up investor interest at a time when valuations are under stress,” said a source.
According to experts, it is a confidence-building measure to show that the founder is leading the funding round and tell the existing investors not to worry about the valuation. He might be getting this loan at a favorable interest rate.
Besides pledging the shares, he also provided a personal guarantee and collateral to the banks to raise this loan. In June 2021, Byju’s became India’s most valuable unicorn, surpassing fintech company Paytm’s $16 billion valuations, which later went for an initial public offering (IPO).