Byju's plans $250 million in Aakash pre-IPO funding
By Team Startupcity | Thursday, 09 March 2023, 12:10 IST
Byju's, the most valued edtech firm in the world, is looking to raise up to $250 million through the sale of convertible notes by its tutoring business, Aakash Educational Services. According to them, Aakash Educational Services will issue the convertible notes at a 20% discount from the unit's anticipated IPO listing price.
Some investors in Byju’s are expected to participate in the round, they said, without disclosing details, citing the sensitivity of the matter. The pre-IPO round at Aakash will help the startup to tide over a liquidity crunch as talks to raise funds at a parent level are getting delayed with a prolonged due diligence process. The Bengaluru-based company had started conversations with bankers late last year to pick arrangers for Aakash’s IPO.
The three-decade-old Aakash, acquired by Byju’s for about $950 million in 2021, runs brick-and-mortar centres to help teenagers prepare for the gruelling tests that rank them for entry into coveted schools such as the Indian Institute of Technology.
Discussions to raise funds in Aakash started after talks with private equity firm TPG and two Middle Eastern sovereign wealth funds for a capital increase at the parent level stalled during due diligence, said.
Byju’s, which grappled with mounting losses after the pandemic-era boom in online tutoring petered out, is in separate talks with creditors to renegotiate an agreement governing a $1.2-billion loan that’s in breach of covenants.
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