Byju Raveendran, founder and CEO of the eponymous edtech giant, has funded his recent $400 million investment in Byju’s through debt he took on from several international banks, two sources familiar with the matter told TechCrunch.
On Friday, the startup announced that it had raised $800 million in a new round of funding, half of which it was financed by the founder.
The revelation immediately caused a stir in the market, as it’s very rare to see a founder invest in a startup that’s about to go public, let alone one with a $22 billion valuation like Byju and Byju der case is.
What makes matters even more interesting is the fact that Raveendran, who taught students before founding Byju’s, has not sold shares in the startup for several years in order to build up a liquidated personal fortune large enough to make such a deal to wear.
Raveendran took out the loan on “very favorable terms,” a source said. He has pledged about 2% stake in Byju’s as collateral to raise the loan, two sources said. He and his family’s stakes in the startup are now nearly 25%, up from about 23%. The founder’s stake enjoys the same rights as other investors in the startup – which prepares students taking courses at undergraduate and graduate level and has expanded in recent years to serve all students, a source said. Both sources requested anonymity as they were discussing private matters.
A Byju’s spokeswoman declined to comment Monday.
If this deal structure sounds similar, it’s because Ritesh Agarwal founded Oyo three years ago made a similar investment in his own startup. But unlike Agarwal’s investment, Raveendran’s loan is not secured by a third party. (SoftBank was on the hook for Agarwal’s personal loan.)
If everything goes according to plan, Raveendran should be able to repay his loan within quarters.
Byju’s has several termsheets to consider for an IPO. The startup’s board has yet to make a decision on which backer it will go with for its reverse merger with a SPAC for the US listing, one of the sources said. It is planned to have listings in both India and the US, but listings are likely to last at least six months, the source said. (An announcement of the IPO could come much sooner.)
The startup hopes to raise up to $4 billion from the IPO. It could raise up to $1 billion of it in a pre-IPO round, one of the sources said, warning that terms and plans are not final.
Byju’s founder took loan to invest $400 million in edtech giant – TechCrunch Source link Byju’s founder took loan to invest $400 million in edtech giant – TechCrunch