Byju was founded and led by former teacher Byju Raveendran, providing lessons for K-12.
According to people familiar with the matter, online education provider Byju’s, India’s most valuable startup, is in advanced discussions to go public through a merger. with one of Churchill Capital’s special-purpose acquisitions.
The startup has held talks with a number of potential SPAC partners and has gone as far as to reach an agreement with Michael Klein’s Churchill Capital, the people said, requesting anonymity to discuss the issues. private topic. Churchill Capital VII raised more than $1.3 billion in a February offering and trades on the New York Stock Exchange.
Under the preliminary terms discussed, Byju’s will raise about $4 billion in total and seek a valuation of about $48 billion, the people said. The startup is valued at $21 billion, according to market research firm CB Insights.
While an announcement could be made as soon as January, the negotiations are far from final. Byju’s or Churchill could still turn down such a deal and Byju’s could consider an IPO in India next year, the people said.
The startup had previously discussed merging SPAC with Michael Dell’s MSD Acquisition Corp and Altimeter Capital Management, one of the people said. India-based companies cannot list shares through regular public offerings in the US under the country’s current regulations.
Byju declined to comment. Churchill did not immediately respond to requests for comment.
The Bangalore-headquartered company, founded and led by former teacher Byju Raveendran, provides K-12 lessons and video materials to millions of Indians studying for their engineering entrance exams. the country’s competitive arts and health care industry. It also offers one-on-one coding, math, and reading classes and materials for students in countries in North America, the Middle East, and Latin America.
Byju’s has aimed to file preliminary documents for a traditional initial public offering as early as Q2 2022 and is also considering a SPAC merger, Bloomberg News reported in September. That’s a boost from previous plans to go public within 12 to 24 months. People familiar with the matter discussed a valuation between $40 billion and $50 billion, although the final decision will depend on financial results and investor needs, who are familiar with the matter. This problem said at the time.
India’s tech sector has skyrocketed this year, with IPO fundraising on track to hit record levels. Venture capital firms have also stepped up investment in the country, partly because the Communist Party’s crackdown in China has made that market less hospitable.
Digital payments pioneer Paytm went public in the country’s biggest-ever IPO, but its shares quickly tumbled. It’s not clear how that episode affected investors’ appetite for large offerings.
Byju’s, officially known as Think & Learn Pvt., has globally renowned investors including Facebook founder Mark Zuckerberg’s Chan-Zuckerberg Initiative, Naspers Ltd., Tiger Global Management and the company. Private equity giant Silver Lake Management.
In a recent conversation with Bloomberg News, founder Raveendran said the startup is targeting a revenue of Rs 10,000 crore ($1.3 billion) for the year ending March 2022, with a profit margin of Rs 10,000 crore ($1.3 billion). 20% profit. Byju’s has started acquisitions in the past year, acquiring startups that offer coding lessons, expertise courses and exam preparation classes for India’s competitive exams.
