India's Byju's raises $340m at $16.5b valuation

The private equity firm was joined by Abu Dhabi sovereign wealth fund ADQ, UBS Group, and US-based Phoenix Rising, as well as Zoom founder Eric Yuan. Citing people close to the situation, The Economic Times described the investment as part of a $1.5 billion round started in April and also featuring B Capital Group.

It follows a string of investments last year worth more than $1.2 billion combined, including a $500 million round in September led by Silver Lake at a valuation of $11 billion. Tiger Global Management, which provided $300 million in January 2020, also joined the Silver Lake round, as did General Atlantic, which separately invested $200 million in February that year.

BlackRock Private Equity Partners and T Rowe Price committed $200 million as recently as November at a valuation of $12 million, according to AVCJ Research. Other investors in the past year include Alkeon Capital, Sands Capital Ventures, DST Global, Bond Capital, and Owl Ventures, a US education technology specialist.

Byju’s is now being touted as India’s most valuable start-up, surpassing mobile payment platform Paytm, which raised a $1 billion round in 2019 at a valuation of $16 billion.

It’s worth noting that local e-commerce leader Flipkart was valued at $24 billion when Walmart acquired a majority stake in 2018. Flipkart received a $1.2 billion top-up last year led by Walmart with support from Tiger, an existing investor.

Byju’s offers K-12 education videos, primarily serving students and exam candidates outside metro areas. It has seen a significant boost in business under COVID-19 conditions. M&A has also driven much of the growth, with the company acquiring rival Whitehat Jr last year for $300 million.

There are now more than 80 million students, including 5.5 million annual paid subscribers. This compares to 64 million students and 4.2 million paid subscribers in September 2020. Annual revenue is said to have doubled during the 2021 financial year to about $800 million. An IPO is expected within two years.

Byju’s is reportedly profitable but has failed to meet its profit targets due to costs associated with its rapid expansion. In addition to Whitehat, recent bolt-ons include Scholr, Osmo, and Toppr.

India’s edtech thesis essentially aims to reconcile a strong cultural prioritization of education with poor infrastructure and educational resources in rural areas. Investment has boomed since the start of the pandemic with increasing interest – both among investors and the general public – in remote services. Byju’s more sizeable competitors in this space include Unacademy, which raised a $150 million round last year at a valuation of $1.4 billion.

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• Topics
• South Asia
• Consumer
• Expansion
• India
• The Blackstone Group
• UBS
• Education
• TMT