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Davidson Kempner backed $250 M debt funding raised by Byju’s

Through a structured credit transaction, US-based alternative investment firm Davidson Kempner Capital Management has provided $250 million to Byju’s.

The fundraising occurs as a major edtech company based in Bengaluru is reportedly looking into raising a larger round of funding.

The transaction was funded by a combination of non-convertible debentures (NCD) and a smaller portion of compulsorily convertible debentures (CCDs) linked to Aakash’s final valuation for the upcoming IPO, according to Economic Times, which broke the news of the development.

For its core business operations, Byju’s obtained a $36.5 million collateral-free loan from its wholly-owned subsidiary Aakash in October of last year. Additionally, Byju’s raised an additional $250 million from long-term investors like the Qatar Investment Authority (QIA). For the unicorn edtech company led by Byju Raveendran, this was the final equity round.

Due to widespread layoffs and alleged FEMA violations, the Enforcement Directorate (ED) has conducted raids at Byju’s. A few weeks ago, the ED searched three locations belonging to Raveendran and his business, Think & Learn Private Limited (Byju’s). Byju’s asserted that the recent visit by ED representatives was connected to a routine FEMA investigation, though.

BlackRock reduced the value of Byju, the largest privately held company in the nation, by almost half, to $11.5 billion. According to Prosus’ accounting entry from November of last year, the edtech company was valued at $5.97 billion. The company is reportedly closing a $1 billion round at its previous valuation of $22 billion despite valuation markdown.

Byju’s revenue increased only 4% to Rs 2280 crore in FY21 from Rs 2,189 crore in the prior fiscal year (FY20), though the company has not yet released its financial data for FY22. According to the company’s annual financial statements filed with the Registrar of Companies (RoC), losses increased by almost 15X to Rs 4,564 crore in FY21 from Rs 305 crore in FY20. The company asserted that its gross revenues for FY22 came close to Rs 10,000 crore.




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