Byju’s in talks for fresh $700-million fund raise

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March 26, 2021 1:45 AM

In an interview with FE in September last year, founder & CEO Byju Raveendran said the company added more than 25 million free users on the platform between April and August compared to just above 40 million in the first four-and-a-half years.

Byju’s, which claims to have as many as 80 million registered users and 5.5 million subscribers, has seen its revenues grow at a compounded 125% over the past three years to approximately $400 million.Facebook co-founder Eduardo Saverin’s startup fund B Capital also participated in the current round through its Asian and global entities.

Edtech start-up Byju’s is in advanced talks to raise $600-700 million in a fresh round of funding, backed by a clutch of investors. Once the deal goes through, it is estimated to give the online education firm a post-money valuation of around $15 billion, sources aware of the discussions said.

Byju’s did not respond to FE’s queries regarding the fund raise.

The fresh capital will come in handy for the Bengaluru-based company that is understood to be in the midst of inking a spate of acquisition deals. FE had last month reported that Byju’s is in discussions to acquire rival Toppr in a transaction worth over $100 million. The firm is also reportedly closing in on a deal worth nearly $1 billion to buy Aakash Educational Services, a company that runs a chain of brick-and-mortar test preparation coaching centres.

The edtech space led by Byju’s cornered the bulk of the start-up funding last year as the pandemic led to a boom in subscriptions for online educational services. A bunch of investors, including new backers like Silver Lake and Alkeon Capital, collectively infused over $1 billion in the company, valuing it at more than $11 billion. In all, the firm has raised nearly $2 billion so far.

Byju’s, which claims to have as many as 80 million registered users and 5.5 million subscribers, has seen its revenues grow at a compounded 125% over the past three years to approximately $400 million. The firm aims to close FY21 with $1 billion in revenues.

In an interview with FE in September last year, founder & CEO Byju Raveendran said the company added more than 25 million free users on the platform between April and August compared to just above 40 million in the first four-and-a-half years.

“Students who benefited by accessing the content signed up for subscription … We are at 4.5 million paid users on a 70 million free user base. Now, a lot of users will continue learning online on the other side of the crisis and we expect the conversion to actually increase,” Raveendran had said.

The market size of Indian edtech sector is estimated to grow by 3.7 times in the next five years, to touch $10.4 billion by 2025 from $2.8 billion in 2020, according to a recent report by EY-IVCA. The segment will see more than 37 million paid users by 2025.

“Increase in digitisation, rapid growth in the start-up ecosystem, the ever-evolving consumer base and the Covid-19 situation has given the edtech sector a huge growth opportunity,” analysts said.

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