Edtech major BYJU’S seeking to raise $250 mn in Aakash pre-IPO funding, reveals report

Edtech major BYJU’S is seeking to raise as much as $250 million through the issuance of convertible notes by its tutoring service unit, a report by Bloomberg has stated.  

Aakash Educational Services, a company that was acquired by BYJU’S will issue the notes that will convert into equity at a discount of 20 per cent to the listing price of the unit’s planned initial public offering, Bloomberg reported.

The pre-IPO round at Aakash will help the edtech giant keep liquidity crunch at bay as the parent company continues to hold talks of fundraising- something which has been getting delayed owing to the prolonged due diligence processes. 

The Bengaluru-based company had started conversations with bankers late last year to pick arrangers for Aakash’s IPO, Bloomberg News had reported.

A Bloomberg report also stated that the company is in separate talks with creditors to renegotiate an agreement governing a $1.2 billion loan that’s in breach of covenants. 

BYJU’S declined to comment on the same. 

Aakash was acquired by BYJU’S in 2021 for about $1 billion. Aakash is one of the acquisitions by the edtech company apart from WhiteHatJr and others. However, unlike WhiteHatJr, Aakash has been running profitably. 

In an interview with Business Today earlier, BYJU’S co-founder Divya Gokulnath said, “Except for WhiteHatJr, all our acquired companies are doing very well.”

She also said that the company is planning to list Aakash in India but cannot share a timeline at present. 

BYJU’S is yet to file its FY22 results. In its FY21 results, BYJU’S parent, Think & Learn Pvt. Ltd, saw its consolidated losses widen by nearly 20 times to Rs 4,588.75 crore in FY21 from Rs 231.69 crore in FY20. Revenues from operations grew marginally to Rs 2,280.26 crore in FY21 from Rs 2,189 crore in FY20. The firm attributed the subdued growth to a change in the way it recognises revenue, as advised by its audit firm Deloitte Haskins & Sells. 

Also Read: Lenskart to raise $500 mn from Abu Dhabi Investment Authority: Report

Watch: Will AI take your job? NR Narayana Murthy, Debjani Ghosh come in support of ChatGPT