Founder of the world’s most valuable edtech start-up Byju’s, Byju Raveendran, is in financing talks to lift his stake in the firm to as high as 40 per cent, citing people familiar with the matter Bloomberg reported.
According to sources, Byju Raveendran is seeking funding to finance the stake repurchases, which could amount to as much as 15 per cent of the firm, by using his shares as collateral.
Byju’s was valued at $22 billion the last time it raised funds, though the buyback may happen at a lower valuation, the sources revealed.
Founded in 2015 and formally known as Think & Learn Pvt., the Bangalore-headquartered start-up shelved plans for a stock-market debut as global markets slumped last year.
Raveendran has about a 25 per cent stake and prominent other investors include the Chan Zuckerberg Initiative, Sequoia Capital India, Blackrock Inc. and Silver Lake.
Talks with shareholders and financiers are still in early stages and may yet fall apart, the people said. Byju’s has raised more than $5 billion to date, according to researcher Tracxn.
Raveendran is in the midst of overhauling the company’s strategy and cutting marketing spend with a goal to be profitable by March. He had announced an infusion of $400 million into his namesake start-up last spring to increase the founder group’s holding by 2 percentage points to about 25 per cent.
The transactions, if completed, will be a rare instance of an Indian founder-entrepreneur raising ownership in a large start-up. The trend to date has been to give up shares and control in order to maximize funding to propel growth.
The company is finalising plans for a $1 billion initial public offering of its tutoring business Aakash Educational Services, and may consider IPOs of other units, Bloomberg reported in November. It is also in conversations with creditors to rework a $1.2 billion loan raised in 2021.