Indian edtech giant Byju’s raises $250 million in fresh funding

Byju's said Monday it has raised $250 million in new funding from existing backers as the Indian edtech giant looks to navigate the market downturn that has forced it to delay its initial public offering.

A person familiar with the matter said that the new funding valued the startup at $22 billion, the same amount as it raised a financing round in March.

The company, India's most valuable startup, wouldn't comment on the valuation but did say that a fund from the state ofQatar participated in the round. Other backers were not identified. Byju Raveendran, founder and chief executive of Byju's, was quoted in an interview as saying that the startup was going to put together a new round of funding.

Byju plans to eliminate 5% of its workforce and cut its marketing budgets in order to improve its finances and achieve profitability by the end of the current financial year.

In the past few years, Byju's has expanded its catalog to include all school-going students. The tutors use real-life objects such as pizza and cake to tackle subjects. Over 150 million people use its services.

Byju's has spent over $2.5 billion in the past two years to acquire startups around the world as the Indian firm expands and broadens its offerings, according to a recent filing. The startup was planning to go public earlier this year at a valuation of over 40 billion dollars. The 13 years bull run was wiped out by a sharp reversal in the global markets.

According to Raveendran, Byju's is now at that sweet spot of its growth story where the unit economics and economies of scale both are in its favor.

The capital that we invest in our business will result in profitable growth and sustainable social impact. In terms of revenue, growth and profitability, 2022-23 will be our best year to date. Our path to profitability is re-affirmed by continued support from our investors.

Byju's has been clearing its debts in recent months. The company paid $234 million to the global investment giant for the acquisition of Aakash.

In the financial year that ended in March this year, it generated a gross revenue of over a billion dollars. The startup made $570 million between April and July. Byju's has raised more than $6 billion and has the support of a number of investors.

The new funding comes at a time when the dealflow activity has taken a severe hit in the South Asian market as investors grow cautious of writing new checks after valuations of publicly listed firms take a tumble. According to Tracxn, Indian startups raised $3 billion in the third quarter, down from the previous quarter and year-over-year.