BYJU'S raises $250 million using structured instruments from Davidson Kempner | Business Upturn

BYJU’S raises $250 million using structured instruments from Davidson Kempner

The edtech company was reportedly aiming to raise $1 billion from US-based asset management firms and Middle Eastern sovereign funds using a mix of stocks and structured instruments, according to a report from earlier this week.

As part of its ongoing $1 billion funding round, Indian edtech giant BYJU’S has received $250 million from US investment company Davidson Kempner Capital Management. The monetary the infusion brings relief to the Bengaluru-based company after an extended time of financial strain and regulatory difficulties.

People with insight into the situation claimed that the company is in advanced talks with a number of global investors, notably sovereign wealth funds situated in West Asia, to finalise the funding round.

Although the company has maintained its $22 billion value, the latest investment round is quite structured and is dependent on the public listing of its subsidiary Aakash Educational Services, according to sources.

The intentions for the Aakash IPO were confirmed in February by BYJU’S co-founder Divya Gokulnath. “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 stated.

In its most recent funding round, BYJU raised $250 million from its current investors, including Qatar Investment Authority (QIA), in October 2022. Since then, the company has been attempting to raise funds, especially to return a portion of the $1.2 billion it borrowed from an association of creditors in November 2021. According to sources, the firm has been negotiating the loan’s terms and requesting more time from its creditors.

The Enforcement Directorate (ED) recently opened an investigation into the company for possible foreign exchange acts of violence. Three locations connected to BYJU’S had been inspected by the ED.

Byju Raveendran, the company’s founder and CEO, claimed in an internal email to his team that the focus was set on them as a result of the significant foreign funding they have received and the amount of international acquisitions they had done.

Raveendran informed his staff that the company had followed with all laws and that all transactions were being reviewed by experts.”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 stated.