BYJU'S raises $250 mn from Davidson Kempner as part of ongoing $1-bn funding round

Indian edtech major BYJU'S has raised $250 million from US investment firm Davidson Kempner Capital Management, which is part of its ongoing $1-billion funding round. The fund infusion offers the Bengaluru-based company a sense of relief after an extended period of financial stress and regulatory headwinds.

The company is in advanced discussions with a bunch of global investors, including West Asia-based sovereign wealth funds, to close the funding round, people aware of the development said.

BYJU'S did not respond to Business Today's queries about the funding round.

While the company has managed to maintain its valuation of $22 billion, the new funding round is a heavily structured one, tied down to the public listing of its subsidiary Aakash Educational Services, sources said. In February, BYJU'S co-founder Divya Gokulnath had confirmed the Aakash IPO plans to BT in February. “We would like to list it in India and we are working on it. We have been planning it for a few months now,” she had said.

BYJU'S last fundraise was in October 2022 when it secured $250 million from its existing investors including Qatar Investment Authority (QIA). The company has been trying to raise funds since then, primarily to repay portion of the $1.2 billion it availed in November 2021 from a group of creditors. As per reports, the company has been seeking more time from its creditors as well as negotiating the terms of the loan.

The company was subject to an investigation by the Enforcement Directorate (ED) for alleged foreign exchange violations recently. ED had conducted searches at three premises linked to BYJU'S. Its founder and CEO Byju Raveendran, in an internal email to his employees, said the scrutiny was brought upon them because of the extensive foreign funding they have received and the number of overseas acquisitions they have made.

Raveendran reassured his employees that the firm had complied with all regulations and all transactions are being vetted by professionals. "BYJU'S has taken all efforts to fully comply with all applicable foreign exchange laws and all our cross- border transactions have been duly vetted by both its professional advisors/counsel and advisors/counsel of the investment funds and other sophisticated counterparties," the note read.

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