Bengaluru-headquartered edtech decacorn Byju’s has raised USD 122 million from DST Global, the investment firm set up by Israeli-Russian billionaire Yuri Milner, according to the regulatory filings.
Byju’s has allotted 42,666 Series F preference shares at an issue price of INR 213,042.13 (USD 2866.12) per share, a report by local media Entrackr said. However, it said, DST might put more money in Byju’s as its Series F round appears to be ongoing. Earlier this month, Byju’s was reported to be in talks with the Hong Kong-headquartered VC firm for a check of USD 400 million.
The recent transaction gives DST a 1.2% stake in the world’s most valuable edtech startup. Entrackr report estimates the fresh funding was made at a valuation of USD 10 billion, similar to the valuation it got in June when it received USD 23 million from the American investment firm Bond. Although, it was reported by other media publications that deal with Bond valued Byju’s at USD 10.5 billion.
Currently, the promoters of Byju’s–its founder and chief executive Byju Raveendran, his wife Divya Gokulnath, and brother Riju Raveendran–hold about 33.1% stake in the company worth nearly USD 3.3 billion, the report said.
This brings the total investment that Byju’s has raised this year to USD 545 million. 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.
To date, it has raised over USD 1.3 billion from the global high-profile investors including Chan Zuckerberg Initiative, Sofina, Sequoia Capital, Lightspeed Venture Partners, Qatar Investment Authority, Tiger Global Management, General Atlantic, Naspers, Tencent, and Bond, among others.
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The company has grown rapidly during the ongoing pandemic. According to the company, for the period of April and May–when India was under the nationwide lockdown to prevent the spread of COVID-19–it made a combined revenue of USD 99 million (INR 710 crores). Moreover, it added more than 20 million new users in the past four months.
Set up in 2011 by Raveendran, Byju’s currently offers online learning courses for grades 1 to 12 (or K-12) and preparation courses for competitive exams. It claims to have 3.5 million annual paid subscribers, and over 57 million registered users.
Byju’s needs capital to execute its growth plan at two levels. First, it has to expand operations in India across different edtech categories, to enlarge its user base. Its acquisition of coding tutoring startup WhiteHat Jr for USD 300 million earlier in August is a move in that direction. The company is reportedly in advanced talks to acquire Doubtnut, a doubt-solving platform. Second, it would require venture money to take its products overseas.
According to a recent report by Bengaluru-based research firm Convergence Catalyst, the first half, especially the first four months of 2020 witnessed a significant growth in VC funding in Indian edtech companies, primarily those with D2C (Direct-to-Consumer) models. Between March and April 2020, 14 startups have been funded, of, which nine were seed-stage rounds, it said.
Overall, investors pumped in USD 795 million into Indian education tech companies in the first half of 2020. And the momentum is continuing well into the second half of the year as well. Last week, Mumbai-based edtech company Lead School raised a USD 28 million funding round from Mauritius- and US-based WestBridge Capital. In July, education technology startup Toppr raised USD 46.8 million in its Series D round led by Dubai-based strategic investment firm Foundation Holdings. The same month, live tutoring startup Vedantu raised USD 100 million in its series D funding round led by 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. Another edtech firm, ClassPlus, is reportedly looking to raise a USD 15 million round from Falcon Edge.
A report by consulting firm RedSeer and investment firm Omidyar Network estimates the Indian edtech market to become a total of USD 3.5 billion-opportunity by 2022.
