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Byju's valuation rises to $5.5 billion in latest round of funding

The edu-tech startup's valuation has jumped by $2 billion in its ongoing Series F round, which kicked off in December. While such spikes in a single round are unprecedented, Byju's rapid growth has made it possible.

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Byju's valuation rises to $5.5 billion in latest round of funding
Byju's is the most well-funded edu-tech player in India, and has been growing at 100 per cent for the last three years

Byju's, the world's most valued education technology firm, has made history in its ongoing Series F funding round. It saw its valuation rise to $5.5 billion earlier this month, a jump of nearly 53 per cent - an unprecedented record in a single round - from December, when it had kicked-off the fundraising, Mint reported. Back then Byju's had raised $540 million at a valuation of $3.6 billion from South African media giant Naspers, Canada Pension Plan Investment Board and private equity giant General Atlantic to emerge as the country's fourth largest startup after Walmart-Flipkart, Paytm and Ola.

The Bengaluru-based startup, which count counts Sequoia, Lightspeed and Tencent among its backers, has so far raised Rs 3,159.4 crore ($460.8 million) in the Series F round, according to data sourced from business information platform Paper.vc. This reportedly includes $86 million that it raised in the first week of July at a valuation of $5.5 billion. It also saw new investors like Qatar Investment Authority (QIA), the sovereign wealth fund of the State of Qatar, and Owl Ventures come on board recently.

Although such valuation jumps within a round are uncommon, Byju's rapid growth has made it possible - after all, it has not only been growing at 100 per cent for the last three years but also turned profitable on a full year basis in FY19. "It is likely that it is commanding steep increases in valuation on a month-on-month basis, not year-on-year, as other startups might," Vivek Durai, founder of Paper.vc, told the daily, adding that Byju's has the highest leverage today among India's unicorns vis-a-vis prospective investors. Its moves to expand its global footprint and launch new course material for students in grades I-III have also contributed to the valuation jump.

Byju's is already the most well-funded edu-tech player in the country, and experts say that it is likely to continue attracting a premium since there aren't too many other large companies in this space. In April, the company boasting over 35 million registered users and 2.4 million paid subscribers crossed Rs 200 crore in monthly revenue.

Speculation is rife that yet more valuation jumps are on the cards. "The amount that an investor pays for a stake in a startup or a new-age company could include an insurance premium for certain rights like liquidation preference and anti-dilution protection," Santosh N., senior adviser-valuation at Duff and Phelps, one of the largest valuation service providers in the world, told the daily, adding that the value of these rights could be as high as 20 per cent of the total investment amount. The remaining 80 per cent is the value of the pure equity.

Byju's is now aiming for a revenue target of over Rs 3,000 crore in the current fiscal, up from Rs 1,430 crore last year.

Edited by Sushmita Choudhury Agarwal

Also read: Byju's raises $150 million from Qatar Investment Authority, Owl Ventures

Also read: E-commerce and consumer internet companies raised over $7 billion in PEVC capital in 2018: EY

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