BYJU’s To Raise $1.2 billion Through Term Loan B Funding; Know Details Here

BYJU’s, the world’s most valuable ed-tech start-up, currently at $18 billion, is in talks to raise $1.2 billion through a Term Loan B (TLB) funding. The company made headlines with acquiring one start-up after another and recently started working with Morgan Stanley to carve out the financial plan to raise $500 million through TLB borrowings in the US.

Now, according to a Money Control report, the ed-tech giant has raised the amount and will now raise $1.2 billion. The rise in the amount is based on the company’s plan to acquire more ventures. The decision also comes in the wake of a soon-to-be-executed Initial Public Offering in the coming year.

A Term Loan B is funding sourced from global institutional investors that can foster a longer-term investment horizon than traditional banks. The tenure for the lending typically falls anywhere between 5-7 years and the major chunk of the money lent is to be paid in the later parts of the tenure. Due to this, the Term Loan B surfaces as an attractive alternative to dealing with Bank bonds.

With the proliferation of online and hybrid modes of education due to the pandemic, BYJU’s saw phenomenal growth in their capital. The company, in the last six months, acquired roughly five start-ups and has increased its share in the ed-tech space to become the most valued in and outside India.

The acquiring drive of the company includes coding platform WhiteHat Jr., offline competitive exam preparation enterprise, Akash Educational Services Limited, and upskilling platform Great Learning. Combining all the acquisitions, the total expenditure by BYJU’s measures to $2 billion.

The company, with plans to raise funds through Term Loan B, is now looking to expand its services globally and may be targeting an overseas acquisition. According to reports and the pattern of fund-raising that is being carved out, it seems that the investors overseas, mainly those from the United States, are finding the Indian tech-space alluring, and the future might have a place for more investments such as these.

With BYJU’s raising money through TLB funding, it is now the second company to choose this path of growing the capital. OYO was the first conglomerate to step into the Term Loan B playground and sought $660 million from global investors.

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