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Byju’s in Talks with TPG To Raise $250-300 M funding: Reports

Edtech company Byju’s is allegedly in discussions with Private Equity (PE) group Texas Pacific Group (TPG) to raise a funding of $250-$300 million

Edtech company Byju’s is allegedly in discussions with Private Equity (PE) group Texas Pacific Group (TPG) to raise a funding of $250-$300 million. It may be noted that the edtech giant received $250 million from its current backers , Qatar Investment Authority (QIA) and Tiger Global last month. Byju’s had recently taken a loan from its subsidiary Aakash Educational Services Limited (AESL) for INR 300 crores at a rate of interest of 7.5% annually.

According to the report, the most recent investment round may be part of a larger $400–500 million round that the edtech company plans to raise through convertible instruments.

The report which cited sources said that Texas Pacific Group (TPG) is one of the many investors the edtech giant is now in discussions with, and the earliest rounds of due diligence have already started.

The discussions, are still in the early stages and may not necessarily result in a contract. The agreement, if it goes through, will probably be set up with a minimum guarantee of return.

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Several reports claim that the terms of the last round with Qatar Investment Agency (QIA) were similar

Several reports claim that the terms of the last round with Qatar Investment Agency (QIA) were similar. According to the report, the talks are taking place at BYJU’s most recent valuation of $22 Bn. TPG has been in contact with the leading provider of educational technology for some time, but the most recent round with QIA is said to have intrigued the PE firm’s attention.

According to the above- mentioned report, Byju’s is trying to reach investors in two ways. The investors have the option of investing at a valuation of $22 billion or choosing a convertible pre-IPO instrument with a floor price of $22 billion and a ceiling of $35 billion at a 20% discount.

With more than $6 bilion in funding from more than 70 investors, the edtech leader is one of India’s most valuable companies. On the other hand, Byju’s has been unable to complete the $800 Mn investment round it announced in March 2022 because some investors withdrew due to unfavourable global macroeconomic conditions.

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A Bloomberg report states that plans for a $1 billion initial public offering (IPO) are being finalised by Byju’s of its tutoring company Aakash Educational Services according to persons familiar with the matter

A Bloomberg report states that plans for a $1 billion initial public offering (IPO) are being finalised by Byju’s of its tutoring company Aakash Educational Services according to persons familiar with the matter. It further stated that because the company seeks arrangers for the listing, the company is said to be in discussions with at least four foreign banks, including Citigroup Inc., Morgan Stanley, JPMorgan Chase & Co., Goldman Sachs Group Inc., as well as Indian banks like Kotak and Axis Bank Ltd., according to the source who requested to stay anonymous about the discussion. The asset may be worth between $3.5 billion and $4 billion, according to the source.

According to the sources, a Draft Red Herring Prospectus, which is necessary to begin the IPO process in India, is predicted to be submitted in January or February, and Byju’s may select the lead bank in two weeks. According to sources, Byju’s hopes the IPO would happen in late August or early September.

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The top provider of offline exam preparation in the country has more than 200 locations around the country and has increased its digital test preparation services.

Byju’s refused to comment through a representative. While Morgan Stanley, JPMorgan, Axis and Kotak did not immediately reply to comment requests, representatives from Goldman Sachs and Citigroup declined to do so.

The three-decade-old Aakash, which Byju’s acquired for roughly $950 million last year, operates physical centres to assist teens in getting ready for the competitive exams that rank them for admission to prestigious colleges like the Indian Institute of Technology. The top provider of offline exam preparation in the country has more than 200 locations around the country and has increased its digital test preparation services.

Furthermore, Byju’s had reported a loss that had nearly doubled to INR 4,588 Cr in the FY21 reports that were released in September 2022, 18 months after the fiscal year had concluded.

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