Edtech startup Byju’s raises $1.2 billion through TLB funding

The borrowing comes as India’s most valued startup is looking to refinance itself after spending over $2.2 billion on an acquisition spree this year.

Edtech unicorn Byju’s has raised $1.2 billion through a term loan B (TLB) funding. The development makes Byju’s the second company in India to have raised a TLB after Oyo, which in July raised $660 million to refinance existing debt.

TLB is used in the lending market to refer to a piece of senior secured credit facilities obtainable to a borrower that is designed to be regulated in the institutional loan market. TLBs usually have a floating interest rate, with tenures of 5 to 7 years.

Byju’s was reportedly in works with American investment banks JP Morgan and Morgan Stanley to structure the TLB financing which was originally supposed to raise $ 500 million. However, the fund round was upsized due to a surge in demand from investors. 

The borrowing comes as India’s most valued startup is looking to refinance itself after spending over $2.2 billion on an acquisition spree this year. Its list of acquisitions this year include the online upskilling platform Great Learning for $600 million, US-based reading platform Epic for $500 million, and coaching firm Aakash Educational Services Limited, which it acquired for $1 billion. 

The company unveiled in a filing that it will use these funds for general corporate purposes. However, the edtech unicorn had earlier disclosed that it planned to primarily use the funds for acquisitions, while a part of the money raised would also be employed as working capital.

Byju’s has raised over $1.5 billion over the last 18 months, buoyant on the growth of online education that surged during the COVID-19 pandemic. In its latest round of funding in June, the company accumulated $350 million from investors such as UBS, Blackstone, ADQ, Phoenix Rising, propelling the total valuation of the startup to $16.5 billion. 

As of September, Byju’s had over 100 million registered students and 6.5 million paid subscribers. The company is also looking to list itself on the stock market with an initial public offering within the next year. 

 

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