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Byju’s secures $200m from Tiger at $8 billion valuation

New York-based Tiger Global Management has invested $200 million in education app Byju’s, valuing the Bengaluru-headquartered company at about $8 billion.

ET Bureau|
Updated: Jan 10, 2020, 10.50 AM IST
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Byju's is likely to further raise $1 billion through the course of this year and is in talks with multiple investors, including certain US-based endowment funds.
NEW DELHI: New York-based Tiger Global Management has invested $200 million in education app Byju’s, valuing the Bengaluru-headquartered company at about $8 billion. The investment, in the edtech firm Think and Learn, which owns and operates the K-12 learning app Byju’s, was confirmed by the company, which declined to comment on specific details of the transaction.

Tiger Global, one of the most influential investors in the Indian startup ecosystem, has been negotiating an investment in Byju’s for the past few months, said two people aware of the developments. They indicated that secondary transactions, estimated at $100-200 million, may also take place, providing exits to some of the early backers of the eight-year-old company.

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“We are happy to partner with a strong investor like Tiger Global Management. They share our sense of purpose and this partnership will advance our long-term vision of creating an impact by changing the way students learn,” founder Byju Raveendran said in a statement.

Byju’s had raised about $971 million before the latest round of funding according to data collated by industry tracker Tracxn.

The company — the only profitable consumer internet unicorn to have emerged from India — is likely to further raise $1 billion through the course of this year and is in talks with multiple investors, including certain US-based endowment funds, the sources said.

Startups deemed to be worth over $1 billion are commonly termed unicorns. Byju’s was valued at $5.5-5.7 billion after its previous funding round in July 2019 led by sovereign wealth fund Qatar Investment Authority and San Francisco-based Owl Ventures. The company also counts private equity major General Atlantic, Naspers, Verlinvest, Chan-Zuckerberg Initiative, Sequoia Capital, and Lightspeed Venture Partners as investors. Times Internet, the digital arm of Bennett Coleman and Co, the publisher of The Economic Times, is also an investor in the company.

10th jan byju graph

Founded by engineer and mathematics prodigy Byju Raveendran, the eponymous company is one of the rare Indian consumer internet companies where the founders, which also include Riju Raveendran and Divya Gokulnath, hold close to 35% stake. Mostly, founders of startup unicorns have had their stakes diluted to single-to mid-teen percentage points, after raising substantial rounds of capital, often at rich valuations.

Byju’s, which also provides test prep solutions for CAT, UPSC, JEE and banking exams, posted net income of Rs 20.16 crore for the fiscal ended March 31, 2019.

The company managed to turn in a profit as the number of paid users — which currently stands at about 2.8 million — increased. Byju’s claims it has 40 million registered users on its platform.
Total expenses for FY19, however, rose to Rs 1,321.65 crore from Rs 518.52 crore in the year-ago period, as employee benefit expenses, marketing and promotional costs increased significantly. Revenue in FY19 jumped to Rs 1,341 crore, up from Rs 490 crore in the year-ago fiscal. The company has forecast revenue of Rs 3,000 crore in FY20.

Separately, Tiger Global following the departure of Lee Fixel last year has once again emerged as one of the most active investors in India after a three-year hiatus, picking up stakes in a number of ventures across sectors.

Since late-2018, the investment firm under Wharton School alum Scott Shleifer has pumped in over $400 million in Asia’s third-largest economy. It is in the process of backing startups such as NinjaCart, Razorpay, Moglix and Ola Electric, among others. “Byju’s has emerged as the leader in the Indian education-tech sector. They are pioneering technology shaping the future of learning for millions of school students in India,” Shleifer, partner at Tiger Global, said.

According to a 2017 report by KPMG and Google, India’s online education sector will be a $1.96 billion industry by 2021.

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