Byju’s-Aakash | Business Upturn

BYJU’s creditors agree on amending $1.2 billion loan terms: Details

Adesh Dixit — Mon, 24 Jul 2023 14:19:12 +0000

The steering committee of the creditors group announced on Monday that Byju’s and its lenders, who hold more than 85% of the edtech startup’s $1.2 billion term loan, had agreed to work toward revising that loan by August 3.

The steering committee of ad hoc term loan lenders (the “SteerCo”), who jointly own more than 85% of BYJU’S $1.2 billion term loan, today stated that it and BYJU’S have agreed to cooperate in order to sign and complete a term loan amendment (the “Amendment”) before August 3, 2023. The loan’s acceleration would be promptly resolved by the Amendment’s successful execution, and all pending litigation would be put to rest while preventing additional enforcement efforts.

Regarding the predetermined timeline, SteerCo released the following statement:

“We are thrilled to be moving closer to a finished loan amendment with BYJU’S. This announcement is in line with our stated intention to cooperate with BYJU’S management to preserve the franchise’s worth. We are dedicated to doing our bit to meet the deadline and look forward to finishing the loan amendment during the coming two weeks.

The term loan lender group is advised financially by Houlihan Lokey, while its legal counsel is provided by Kirkland & Ellis LLP, Cahill Gordon & Reindel LLP, and Shearman & Sterling LLP.

Separately, according to two people who spoke to Reuters on Monday, Byju’s has reduced the number of office spaces it has available in Bengaluru as it works to reduce expenses and increase liquidity after letting go of thousands of staff this year.

BYJU’s assures no more BTC layoffs, agrees to pay incentives to stop protests

Adesh Dixit — Sat, 22 Jul 2023 14:41:07 +0000

People with knowledge of the situation told Moneycontrol that on July 22, an emergency town hall meeting with more than 5,000 Byju’s Tuition Centre (BTC) employees resulted in a commitment from India’s most valuable startup to pay staff variable pay and other incentives while also promising not to fire any BTC employees.

The employees of BTC, who were preparing to organize protests across India on July 25 over a number of issues including the non-payment of production-linked pay and crucial incentives among other things, were meeting with Mrinal Mohit, the de facto head of Byju’s India company, who guided the discussions. According to the further sources, Mohit acknowledged that the business will begin paying incentives from next month onward while stating that variable compensation would be distributed in the next quarter.

According to the people, there was rumor that Byju’s would begin firing BTC staff on July 26 due to a significant decline in tuition center enrollment, which had spurred local business leaders to organize pan-India rallies.

Zia Ur Rehman, Area Business Head of a Byju’s Tuition Center, who was terminated on July 21 with immediate effect, claimed that the town hall was not scheduled; rather, it was held to put an end to the protests on July 25. Rehman, who was the primary organizer of the likely protests on July 25, informed Moneycontrol over the phone on July 22 that he had not received any explanation for why he had been fired.

“The firm has conceded to the major demands, thus for the time being, we have chosen not to continue the protests. Rehman, who attended the townhall with a coworker, continued, “We have three key demands: incentives, flexible compensation, and a pledge from them to not lay off any person. On July 21, Rehman’s email account was disabled immediately.

Rising issues at Byju’s Tuition Centers are just the latest in a long list of issues the most valuable edtech business in the world has been dealing with this year. Among these difficulties include the resignations of auditors and directors, searches by the government, and escalating hostilities with term loan B lenders.

Divya Gokulnath, a co-founder of Byju’s, was undoubtedly very optimistic about Byju’s Tuition Centers. In a January interview with Moneycontrol, Gokulnath stated that Byju’s planned to expand up to 300 physical tutoring facilities by 2023.

“We’re building for the way in which students are learning now — the new way of learning, which is hybrid. So we launched 300 hybrid learning centres last year and we plan to do 300 more this year,” Gokulnath said during the World Economic Forum in Davos.

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

Sakshi Vats — Fri, 12 May 2023 19:01:48 +0000

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.

Unacademy backed by SoftBank explores merging with Byju’s-owned Aakash

Sakshi Vats — Fri, 24 Mar 2023 07:12:02 +0000

Three people with updates of the development stated that Byju’s-owned Aakash and SoftBank-backed Unacademy are in talks about merging, which would represent a significant shakeup involving two of India’s most valuable edtech companies.

If the deal goes through, it will be a mix of cash and stock, with the merged entity exploring an IPO (initial public offering) as opposed to Aakash alone seeking a public listing, as is now being contemplated by Byju’s, the sources added.

Although the discussions are still in the early stages and a transaction may fail to materialize, enough has took place for Byju’s founder Byju Raveendran and Unacademy founder Gaurav Munjal to have discussions during the past month.

A second cited person stated that common investors in both companies were keen to see a merger through as the combined entity may present a more compelling case for a potential PO, creating a liquidity event for them. One of the cited individual people stated that only conversations have started and these haven’t reached a term sheet stage yet. A term sheet outlines the terms and conditions of a potential investment and is nonbinding.

According to the sources, Byju may get a board seat while Munjal is expected to run the merged entity. The merger talks were strongly denied by Aakash and Byju’s. Unacademy declined to comment.

A Byju’s spokeswoman wrote to Moneycontrol through email and responded,”We strongly deny that Byju’s is considering a merger of Unacademy into Aakash Educational Services. As a parent company, Byju’s is committed to investing in the growth of Aakash Educational Services, which is growing at more than 50 percent year-on-year.”

Meanwhile, a spokesperson for Aakash stated, “We have had absolutely no discussions with Unacademy or any other player to merge with Aakash Educational Services. Aakash is a market leader in our segment with an impeccable track record of delivery and results and we are focused on our organic growth and delivery to the lakhs of students that have trusted us.”

The two startups, both based in Bengaluru, compete against one another in the hypercompetitive edtech space, but they share a number of investors, including General Atlantic, Tiger Global, and Sequoia Capital. A merger involving elements from their portfolio would allow investors to give Byju’s and Unacademy a better chance of fending off competition since new funding is hard to come by but new rivals such Noida-based PhysicsWallah are gaining ground.

While Byju’s raised its last equity funding round in October 2022 at a flat $22 billion valuation, Unacademy last raised $440 million in August 2021, at a valuation of $3.4 billion. Unacademy has so far raised more than $870 million, and Byju’s has already raised more than $5 billion.

The potential merger could occur at the same time that Byju’s is in talks with bankers on highlighting Aakash on India’s bourses with a valuation aim of $3–4 billion. According to sources, Aakash had revenue of of around Rs 1,400 crore in FY22 (2021–2022) and is expected to cross Rs 2,500 crore this year. At a $3 billion valuation, will have a 10x revenue multiple.

Source:Moneycontrol

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

Cheryll Jain — Mon, 08 Nov 2021 08:30:59 +0000

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.

Byju’s plans to go public before April 2023, says co-founder Raveendran

Meemansa Shekhawat — Tue, 06 Apr 2021 07:13:38 +0000

Byju’s gearing up to go public before April 2023, according to the co-founder Byju Raveendran. Recently, it has acquired Akash Educational Services Limited keeping in view the purpose of reinforcing its existence in the test preparation segment of the country.

The deal got finalized having the worth close to Rs 7,300 cr. Which turns out to be the biggest acquisition by Byju’s till date.

“We could have created a hybrid model (for test preparation) ourselves but that would have taken us 2-3 years to build and a total of five years to show results. Hence, with Akash we saw a real synergy coming together of conceptual learning’’, said the co-founder of Byju’s.

Further, he added, “You need a group studying environment and interaction with teachers during preparation which can only be achieved through offline play. Hence, this acquisition allows the online and offline play to come together in the best possible way”; as quoted by Mint.

Again, regarding the IPO plans, he mentioned, “We are seriously thinking of an 18-24 months timeline to look at a public offering. But it can take a bit longer since we are in no hurry and will look at the right market timing,” in an interview with LiveMint.

Byju’s is one of the most paramount educational startups in the country. It was launched in 2015 and as of now, it has successfully established a broad base in the field of education. Over 80 million students are studying through this app while there are around 5.5 million annual paid subscriptions.