Bengaluru-based edtech company Byju’s is in talks with DST Global, the investment firm set up by Israeli-Russian billionaire Yuri Milner to raise USD 400 million.
The deal values Byju’s at USD 10.5 billion and could be signed by the end of the week, a Bloomberg report said, citing a source familiar with the negotiations.
It is to be noted that when American VC firm Bond invested an undisclosed amount in the Bengaluru-based online education firm, the deal was reportedly valued at almost USD 10.5 billion. If media reports are to be believed, it essentially means that there would be minimal or no change in Byju’s valuation from the last round.
If the funding goes through, DST Global would join other high-profile investors including  Sequoia Capital, Lightspeed Venture Parters, Qatar Investment Authority, Tiger Global, General Atlantic, Naspers, Tencent, and Bond, among others, at the cap table of Byju’s, the world’s most valuable edtech startup.
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The nine-year-old company had raised funding from Tiger Global Management in January, and an additional investment from existing investor General Atlantic a month later. Byju’s did not disclose the sum raised for either of the rounds, but media reports, citing sources, said both investors had pumped in USD 200 million each. In June, when Bond came along, the reported check size was about USD 100 million. That takes the total funding that Byju’s has raised this year to almost half a billion US dollars.
DST Global, which primarily makes late-stage investments in internet companies, has backed some of the renowned tech companies like Facebook, Twitter, Stripe, Spotify, Xiaomi, Alibaba, JD.com, Airbnb, and WhatsApp among others. In India, it has written checks for e-tailer Flipkart, cab-hailing app Ola, food delivery startup Swiggy, and B2B e-commerce portal Udaan.
Byju’s was set up in 2011 by a locally known teacher Byju Raveendran, as an offline tutoring chain, which made its online debut in mid-2015 with its app. It currently offers online learning courses for grades 1 to 12 (or K-12)and preparation courses for competitive exams.
The company claims to have 3.5 million annual paid subscribers, and over 57 million registered users and over 3.5 million paid subscribers. It also claimed to have clocked a profit of USD 2.6 million (INR 20 crore) in FY19. According to Byju’s, during April and May, the two months when the nation was under the lockdown to prevent the spread of coronavirus, it made a combined revenue of USD 99 million (INR 710 crores).
This year, edtech has emerged as one of the most sought after sectors by global as well as local venture capital firms. With investors pumping in USD 795 million into Indian education tech companies in the first half of 2020, it’s no exaggeration to say that this year is dedicated to edtech startups. And the momentum is continuing well into the second half of the year as well.
Late last month, Mumbai-based education technology startup Toppr raised USD 46.8 million in its Series D round of funding led by Dubai-based strategic investment firm Foundation Holdings. The same month, Bengaluru-based live tutoring startup Vedantu raised USD 100 million in its series D funding round led by US-based tech-focused hedge fund Coatue Management, with participation from existing investors. Similarly, Unacademy is reportedly in talks with multiple investors to raise USD 110 to 150 million at a valuation of USD 1 billion.
According to a recent report by consulting company RedSeer and investment firm Omidyar Network, the Indian edtech market is on its way to becoming a total of USD 3.5 billion opportunity by 2022.
