Bloomberg Línea — Indian edtech platform Byju’s has raised a $250 million investment round with its existing investors to aid its restructuring, and which has kept the startup’s valuation steady at $22 billion, a person familiar with the transaction told Bloomberg News.
Qatar Investment Authority QIA, Qatar’s sovereign wealth fund, led the new investment, according to the source. Other investors in the company include Chan-Zuckerberg Initiative, Naspers, CPPIB, General Atlantic, Tencent, Sequoia Capital, Sofina, Verlinvest, IFC, Aarin Capital, TimesInternet, Lightspeed Ventures, Tiger Global, and Owl Ventures.
Last month, Byju’s reported a loss for the year ending March 2022 in its audited financial results, while last week the company said it would lay off 2,500 employees, or about 5% of its total workforce, and reduce its marketing and sales costs.
The staff cuts include Brazil, following cost containment at tech companies caused by the rising interest rate environment and reduced capital for venture assets. The company began operating in Brazil last year with about 300 professionals, offering online programming classes for children through Byju’s Future School product.
The company will use the new capital to help it become profitable, founder Byju Raveendran said in a press release. According to the founder, Byju’s is now at “that sweet spot in its growth story where unit economics and economies of scale are in its favor”.
“This means that the capital we now invest in our business will result in profitable growth and create sustainable social impact,” he said.
Raveendran claimed that regardless of adverse macroeconomic conditions, 2022 and 2023 will be the best years in terms of revenue, growth, and profitability for Byju’s. “The continued support from our esteemed investors reaffirms the impact created by us so far and validates our path to profitability.”
The edtech claims to have more than 150 million learners in more than 120 countries.
Byju’s said it aims to reach profitability by March next year. To achieve this, the company said it will consolidate all its K10 India subsidiaries into a single unit. Aakash Education and Great Learning, which the company acquired, will continue to operate as independent units.
The company also said it will redirect its marketing budget to overseas markets, as in India the company “has already become one of the most popular consumer brands”.
Byju’s also said it is increasing the strength of its interior sales team for more efficient and effective consumer-centric lead conversions.
The startup also operates in Mexico, the United States, England, Australia, New Zealand, and Indonesia and has adopted an expansion strategy with significant acquisitions, such as US-based reading application Epic, for $500 million, Singaporean company Great Learning, for $600 million, US coding site Tynker, for $200 million, and Austrian math platform GeoGebra for around $100 million.
With information from Bloomberg News