Byjus Raises $250 Million From Davidson Kempner As Part Of $1 Billion Round

EdTech decacorn Byju’s has raised $250 million in debt funding from Davidson Kempner Capital Management, a US-based investment manager. This round is part of an ongoing $1 billion funding round, a mix of debt and equity, from both existing and new investors and will be raised at the current valuation of $22 billion, said two people with knowledge of the development.

“The company is expecting to close the $1 billion round by end of the month," said a person with direct knowledge of the matter. According to the second person cited above, the company is in talks with Middle East-based sovereign wealth funds and family offices to raise the remaining amount.

“It is going to be a mix of equity and structured debt," the second person added.

A spokesperson for Byju’s declined to comment.

The Bangalore-based company has been under pressure after the accounting change it brought about in reporting its financials for FY 21 that led to a massive drop in its revenue realisations and squeezed its profits out. It is yet to file its FY 22 results.

Byju’s, founded in 2011, saw its losses widened to ₹4,589 crore from ₹232 crore in the previous fiscal.

The company has also seen some of its early investors exploring to cash out, as reported by Mint earlier. A few have farmed out ‘soft’ mandates to investment banks to look for buyers, the report said.

The company has also faced heat from its bond holders for the senior debt it raised in 2021. Amidst delay in filing its financials, the bond holders have been renegotiating the terms of the loan with the company, which has further put pressure on Byju Raveendran-led company to manage its cost of capital well.

Davidson Kempner Capital Management LP is a global institutional alternative investment management firm with over $36 billion in assets under management. In December 2021, the New York-based investor launched its local arm, Davidson Kempner Investment Advisors India Pvt. Ltd. It has leased an office space at Bandra Kurla Complex in suburban Mumbai. It has roped in Ambrish Singh, former Nomura investment head, as part of its Mumbai leadership team to expand its business in India.

As per a VCCirle report, Davidson Kempner invests out of its global funds in credit and equity strategies including special situations as well as real assets across the capital structure, and in public and private markets. It is exploring opportunities across equity and debt transactions in India.