Byju's founder raising funds to buy back as much as 15% of firm: Report

Digital Desk: Byju Raveendran, the founder of the most valuable edtech business in the world, is in negotiations to raise his ownership position to as much as 40%, according to sources familiar with the situation.

According to the persons, the former instructor is looking for funds to use as collateral for his shares to finance the stake repurchases, which might represent up to 15% of the company. The previous time Byju's raised capital, the company was valued at $22 billion; however, the buyback may occur at a lower price, the people said, requesting anonymity to discuss private negotiations.

The Bangalore-based company, formerly known as Think & Learn Pvt., was founded in 2015 but shelved plans for a public market debut when the world's markets tanked in 2017. In addition to the Chan Zuckerberg Initiative, Sequoia Capital India, Blackrock Inc., and Silver Lake, Raveendran owns around 25% of the company.

The people indicated that discussions with shareholders and lenders are still in the early stages and could fail. According to researcher Tracxn, Byju's has so far raised more than $5 billion. An email asking for comment on the fundraising efforts received no response from a company spokesperson.

To become profitable by March, Raveendran is in the process of changing the company's strategy and reducing marketing expenditure. Last spring, he had announced a $400 million investment into his startup bearing his name, boosting the founder group's ownership by 2 percentage points to around 25%.

If the transactions go through, it will be a unique occurrence for an Indian founder-entrepreneur to increase ownership in a significant firm. Giving away shares and control to increase money for growth has been the current trend.

According to a November report by Bloomberg, Byju's is completing plans for a $1 billion initial public offering of its tutoring company Aakash Educational Services, and may also contemplate IPOs of other divisions. Additionally, it is negotiating a rewrite of a $1.2 billion loan obtained in 2021 with creditors.