Byju's to raise $1.2 bn through term loan funding; plans North America expansion: Sources

India's edtech decacorn Byju's has upsized its Term Loan B (TLB) funding from $700 million to $1.2 billion, in the wake of peaked interest from institutional investors, sources privy to the development told BusinessToday.In. The term loan will be a five-year duration credit facility, with a 6.78 per cent interest yield on the maturity of the loan, sources said.

"Byju's parent firm, Think and Learn Pvt Ltd, has said in its regulatory filing that the proceeds will be used to fund general corporate purposes offshore, including to support business growth in North America and fund potential strategic opportunities. The upsize to the term loan has not impacted this use of proceeds," a company insider said.

An official query sent to Byju's remained unanswered at the time of writing this story. It will be updated as and when the company responds.

Byju's has, thus, become the second start-up in India after hospitality unicorn, OYO, to raise money through TLB funding. Earlier this year, OYO had said that it raised $660 million in funding through TLB funding from overseas institutional investors to fund its global acquisition plans. The hotel chain startup said the round was subscribed 1.7 times.

Since last year, the total funds raised by Byju's, with the inclusion of a fresh tranche of TLB investments, now stands at $3 billion. Last month, the edtech giant's valuation zoomed to $18 billion from $16.5 billion, the latest company filings sourced from Tofler by BusinessToday.In shows.

The rise in Byju's valuation occurred on the back of the edtech giant's Series F fundraise. In that round, the company raised Rs 2,200 crore (nearly $300 million), which was led by Oxshott Venture Fund LLC. Oxshott had invested Rs 1,200 crore in the company in return for around 1 per cent stake in the firm. Other investors who participated in the Series F fundraise were Edelweiss, IIFL, Verition Multistrategy Master Fund, and XN Exponent Holdings, among others. The Bengaluru-headquartered firm had also received nearly $200 million from a bunch of investors in July.

The global edtech leader is currently planning to expand into the overseas markets, including the US and the Middle East, leveraging the acquisitions it has made so far, sources said. The company has spent over $2 billion to acquire new companies this year.

Early this year, Byju's had acquired one of the largest chains of private tuition centres, Aakash Educational Institution, for $1 billion. In July, the edtech major acquired Singapore-based upskilling platform, Great Learning, for $600 million in a stock-and-cash deal.

Byju Raveendran, the company's founder and CEO, had earlier said his firm will plan acquisitions in the future as well but will also target profitability. He also pointed out that Byju's could go for an IPO in the next couple of years.

Morgan Stanley, in a research note, had earlier pointed out that should Byju's go the IPO route, it could value the company at nearly $50 billion, thereby making it more valuable than fintech major Paytm's IPO. Byju's claims it has almost 80 million users on its platform.

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