Byju’s said Monday it has raised $250 million in new funding from existing backers as the Indian edtech giant looks to navigate the market downturn that has forced the firm to postpone its initial public offering and cut thousands of jobs.
The new funding valued the Bengaluru-headquartered startup at $22 billion, the same figure at which it raised a financing round in March this year, a person familiar with the matter said.
The company, India’s most valuable startup, declined to comment on the valuation but said Qatar’s sovereign fund, Qatar Investment Authority, participated in the round. It did not identify other backers. Byju Raveendran, founder and chief executive of Byju’s, told TechCrunch in an earlier interview that the startup was engaging with existing sovereign funds to put together a new round.
Monday’s funding announcement follows Byju’s plan to eliminate 5% of its workforce, or about 2,500 roles, across multiple departments, and cut its marketing budget as it looks to improve its finances and achieve profitability by end of the current financial year.
Byju’s prepares students pursuing undergraduate and graduate-level courses, and in recent years it has also expanded its catalog to serve all school-going students. Tutors on the Byju’s app tackle complex subjects using real-life objects such as pizza and cake. The startup says more than 150 million learners use its services.
Byju’s has spent over $2.5 billion in the past two years to acquire startups globally as the Indian firm expands and broadens its offerings in several international markets, Prosus Ventures, a backer of Byju’s, disclosed in a recent filing. The startup was planning to go public via the SPAC route earlier this year at a valuation north of $40 billion. But those conversations did not materialize into a deal as a sharp reversal in the global markets wiped much of the gains from the 13-year bull run.
“Byju’s is now at that sweet spot of its growth story where the unit economics and the economies of scale both are in its favour,” said Raveendran (pictured above) in a statement today.
“This means the capital that we now invest in our business will result in profitable growth and create sustainable social impact. Regardless of the adverse macroeconomic conditions, 2022-23 is set to be our best year in terms of revenue, growth and profitability. Continued support from our esteemed investors re-affirms the impact created by us so far, and validates our path to profitability.”
Byju’s has moved to clear its debts and other balances in recent months. It recently cleared all its dues to Blackstone by paying $234 million it owed the global investment giant for the $1 billion acquisition of Aakash, TechCrunch reported earlier.
It generated a gross revenue of $1.258 billion (unaudited) in the financial year that ended in March this year. Between April and July, the startup logged revenue of $570 million, 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 nearly $6 billion to date.
The new funding comes at a time when the dealflow activity has taken a severe big hit in the South Asian market as investors grow cautious of writing new checks and evaluate their underwriting models after valuations of publicly listed firms take a tumble. Indian startups raised $3 billion in the quarter that ended in September, down 57% from the previous quarter and 80% year-over-year, according to market intelligence platform Tracxn.