Fund-raising drive on track, majority of the $800 mn received, says Byju's

The firm said its payments to education firm Aakash for a $1-billion deal struck last year have concluded and the audited financial results will be out in 10 days

Following a media report alleging that Byju's raised a fake investment and delayed payment to a group firm, the edtech giant said its fundraising efforts are on track and the majority of the $800 million has been already received.

“The balance is also expected soon,” said a Byju’s spokesperson.

The firm also said that its payments to education firm Aakash for a $1-billion acquisition struck last year, have concluded and that the audited financial results will be announced within the next 10 days.

According to a report by The Morning Context, the $800 million funding that the firm announced this March has gone off track. It also said that the money from Sumeru Ventures, a participant in the round, has gone off track, raising questions about the fund’s antecedents.

According to data platforms Tracxn and Crunchbase, Sumeru Ventures is based in Los Angeles, US, and has also backed other unicorns such as food delivery firm Swiggy and local language tech platform VerSe.

In March this year, Byju’s said it had raised $800 million in the latest funding round, with founder and Chief Executive Officer Byju Raveendran contributing half the sum. Sumeru Ventures, Vitruvian Partners, and BlackRock also participated in the round, taking the Bengaluru-based company’s valuation to about $22 billion from $18 billion earlier.

After making a personal investment of $400 million in the company, Raveendran’s stake jumped from 22 per cent to about 25 per cent, sources said. They said Raveendran was in discussion with various international and domestic banks to raise $400 million as a loan against shares, to help him to shore up investor interest at a time when valuations are under stress.

A few media reports also said that Byju’s is pushing back payments for an approximately $1-billion acquisition struck last year. At the same time, other reports also said that to expand in the US, Byju’ has offered to buy 2U Inc. in a cash deal that values the US-listed edtech company at more than $1 billion.

“Our payments to Aakash are closed,” said Byju’s spokesperson. “The audited financial results are going to be announced in the next 10 days."

The firm has also issued pink slips to hundreds of employees. It has laid off about 500 employees at its group companies —WhiteHat Jr and Toppr. It’s a move to drive cost efficiency, according to the company. The number of layoffs, cutting across various department functions, may increase, sources said. While another media report put the number of people laid off at around 2,500, the company denied it.

Byju’s said in order to reduce redundancies across the organization after multiple acquisitions, the firm had to let go of nearly one per cent of its over 50,000-strong workforce.

“This retrenchment was a result of a strategic decision to improve business efficiencies throughout Byju’s and its group companies,” said Byju’s spokesperson. “Byju’s remains a net hirer. With 50000 employees and growing, we take immense pride in our role as India’s largest job creator among startups. Byju’s continues to hire across levels for various businesses,  departments and functions."

All these developments come at a time when the Byju Raveendran-led firm was planning an IPO. The company wants to go public by next year. It may do a primary listing in the US and a secondary one in India or vice-versa, reports had suggested earlier. Both the US and India are key markets for Byju’s.