Edtech Decacorn Byju's Raises $250Mn In Fresh Funding From US Investment Firm Davidson Kempner The funding round comes at a time when Byju's has been engulfed with many troubles including the recent search and seizure operations by ED
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EdTech major Byju's has raised $250 million funding round from US-based investment manager Davidson Kempner Capital Management. This round is part of an ongoing $1 billion funding round with participation from both existing and new investors.
According to a Mint report, which quoted two people with knowledge of the development, this ongoing round will be raised at the current valuation of $22 billion.
The edtech major is also reportedly in advanced talks with Citi and Goldman Sachs to move ahead with Aakash's IPO plans. According to media reports, it has received board approval for the IPO plans and is preparing to file the paperwork in the matter.
This comes at a time when the edtech unicorn Byju's has been engulfed with one problem after another, the latest being the search and seizure operations conducted at three premises in Bengaluru by the Enforcement Directorate under Foreign Exchange Management Act (FEMA) with regards to money laundering. The searches reportedly revealed that the edtech startup had received foreign direct investment of around INR 28,000 Cr between 2011 to 2023 and remitted INR 9,754 Cr to various foreign jurisdictions during the same period.
India's edtech industry amid funding winter
The fundraise comes with a whiff of fresh air amid a funding winter that has led to a funding crunch in the Indian startup ecosystem. For the edtech industry, the reopening of the schools was already a dampener and the funding crunch added fuel to the fire. So much so that except Physics Wallah, most unicorns and soonicorns in the edtech sector reported a negative profit before tax for FY22.
While the Bengaluru-based edtech decacorn is close to raising an additional $700 Mn from investors and is looking forward to IPO plans of its subsidiary Aakash (according to a report by TechCrunch, quoting sources), other edtech startups have also ramped up offline offerings. Following Byju's footsteps, many edtech majors including Vedantu, Physicswalla are taking the hybrid route to tackle the online slump. Offline+online model is being considered the way forward for edtech companies to keep the unit econimics going.