Byju’s Struggles to Close $800 Million Funding Round, as Global Technology Rout Affects Valuations

Indian online education provider Byju's is struggling to close a funding round of $800 million (roughly Rs. 6,360 crore) as a global technology rout weighs on valuations.

Investors including Sumeru Ventures and little-known firm Oxshott haven't transferred about $250 million (roughly Rs. 2,000 crore) of the targeted amount because of “macroeconomic reasons,” a Byju's spokeswoman said Monday without elaborating. The two firms should come through by the end of August, she added. Founder Byju Raveendran however has completed an injection of about $400 million (roughly Rs. 3,000 crore) into the startup as part of the round, the spokeswoman said.

The delayed funding for India's most valuable startup is likely to trigger renewed concerns about India's consumer technology industry, where public valuations on major players from Zomato to Paytm have plummeted in recent months. The completed fundraising would have valued the startup at $22 billion (roughly Rs. 1,74,800 crore), and Raveendran's investment was a rare instance of an Indian founder taking part in a venture capital round at a late-stage startup. Sumeru Ventures didn't respond to an email seeking comment.

Bangalore-based company Byju's, backed by Bond Capital, Silver Lake Management, Naspers and Tiger Global Management, has been seeking to expand abroad through big acquisitions. It offered more than $1 billion (roughly Rs. 7,900 crore) to buy US-listed edtech company 2U, even as it initially pushed back payments to take over test-preparation provider Aakash Educational Services, Bloomberg News reported last month.

Raveendran, 42, the son of educators, founded his startup in 2015. Byju's, whose parent company is formally known as Think & Learn Pvt, is the largest of a crop of startups that over the past decade have thrived on India's growing mobile connections and investment from abroad.

Back in May, Bloomberg reported that Byju's was in talks with lenders to raise more than $1 billion (roughly Rs. 7,900 crore) in acquisition financing as the online education provider looks to expand its business rapidly, according to people familiar with the matter. The Bangalore-based market leader was said to be in talks with banks, including Morgan Stanley and JPMorgan Chase & Co., for the funding to acquire another edtech company.

Byju's, led by former teacher Byju Raveendran, has been on a shopping binge in the US and elsewhere in recent years and bought out startups offering coding lessons, professional learning courses, and test prep classes for competitive Indian exams. The startup was valued at $22 billion (roughly Rs. 1,74,800 crore), with fund raising this year and is working on its initial public offering plans, Bloomberg reported earlier this year.

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