New Delhi: Byju’s, the world’s most valued edtech startup, is looking to raise up to $250 million by issuing convertible notes through its tutoring services unit, according to people familiar with the matter.
Aakash Educational Services, the firm’s tutoring business provider, will issue notes that will convert into equity at a 20% discount to the listing price of the unit’s planned initial public offering, he said, asking not to be named because the information is not public. Some investors from Byju’s are expected to participate in the round, he said without disclosing details citing the sensitivity of the matter.
The pre-IPO round in Aakash will help the startup deal with liquidity crunch as talks to raise funds at the parent level are getting delayed with a long due diligence process. Bloomberg News has reported that the Bengaluru-based company began talks with bankers late last year to choose arrangers for Aakash’s IPO.
A representative for Byju’s declined to comment.
Three-decade-old Aakash, to be acquired by Byju’s for about $950 million in 2021, runs brick-and-mortar centers to help teens prepare for the grueling tests that rank them for admission to prestigious schools like the Indian Institute of Technology. Fund raising discussions in Aakash began after talks with private equity firm TPG and two Middle Eastern sovereign wealth funds to raise capital at the parent level, he said.
Meanwhile, Byju’s, which is grappling with mounting losses after the pandemic-era boom in online tutoring, is in separate talks with creditors to renegotiate an agreement governing debt of $1.2 billion Which is in violation of the covenants. Founder Byju Raveendran – the son of teachers and a former teacher himself – is now working on a turnaround plan for the group, vowing to make it profitable this year.
Aakash Educational Services, the firm’s tutoring business provider, will issue notes that will convert into equity at a 20% discount to the listing price of the unit’s planned initial public offering, he said, asking not to be named because the information is not public. Some investors from Byju’s are expected to participate in the round, he said without disclosing details citing the sensitivity of the matter.
The pre-IPO round in Aakash will help the startup deal with liquidity crunch as talks to raise funds at the parent level are getting delayed with a long due diligence process. Bloomberg News has reported that the Bengaluru-based company began talks with bankers late last year to choose arrangers for Aakash’s IPO.
A representative for Byju’s declined to comment.
Three-decade-old Aakash, to be acquired by Byju’s for about $950 million in 2021, runs brick-and-mortar centers to help teens prepare for the grueling tests that rank them for admission to prestigious schools like the Indian Institute of Technology. Fund raising discussions in Aakash began after talks with private equity firm TPG and two Middle Eastern sovereign wealth funds to raise capital at the parent level, he said.
Meanwhile, Byju’s, which is grappling with mounting losses after the pandemic-era boom in online tutoring, is in separate talks with creditors to renegotiate an agreement governing debt of $1.2 billion Which is in violation of the covenants. Founder Byju Raveendran – the son of teachers and a former teacher himself – is now working on a turnaround plan for the group, vowing to make it profitable this year.
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