Davidson Kempner finances Byju’s with $250 million under structured credit agreement

Byju’s has received $250 million from US-based alternative investment company Davidson Kempner Capital Management under a structured credit agreement. The fundraising occurs as a major edtech company located in Bengaluru is reportedly looking into raising a larger round of funding.

The deal was funded by a combination of non-convertible debentures (NCD) and a lesser amount of compulsorily convertible debentures (CCDs) connected to Aakash’s final valuation for the future IPO, according to Economic Times, which broke the news of the development.

Byju’s obtained a $36.5 million collateral-free loan from its wholly-owned subsidiary Aakash in October of last year for its main business operations. Additional $250 million was obtained by Byju’s from preexisting investors, notably the Qatar Investment Authority (QIA). This was the last equity round for the unicorn edtech company managed by Byju Raveendran.

Due to widespread layoffs and ED raids for alleged FEMA breaches, Byju’s has received media attention. ED searched three locations belonging to Raveendran and his business, Think & Learn Private Limited (Byju’s), a few weeks ago. However, according to Byju’s, the latest visit by ED representatives was connected to a standard FEMA investigation.

BlackRock reduced Byju’s valuation by nearly half to $11.5 billion, putting the nation’s biggest valued private firm at risk of a valuation markdown. Prosus valued the edtech company at $5.97 billion in its accounting entry from November of last year. The business is apparently closing a $1 billion financing at its most recent valuation, which was $22 billion, despite valuation markdowns.

Byju’s sales increased barely 4% to Rs 2280 crore in FY21 from Rs 2,189 crore in the prior fiscal year (FY20), while the company has not yet released its financial data for FY22. According to the company’s annual financial records filed with the Registrar of Companies (RoC), losses increased by about 15X to Rs 4,564 crore in FY21 from Rs 305 crore in FY20. The business said that its gross revenues for FY22 were close to Rs 10,000 crore.