Byju’s laid off over 1,000 employees last month.
The fundraising by Aakash will help Byju’s, which is struggling with the delay in its fundraising due to prolonged due diligence process, tide over its liquidity crunch
Edtech major Byju’s is seeking to raise as much as $250 million through the issuance of convertible notes by its tutoring service unit Aakash Educational Services, according to a Bloomberg report citing people familiar with the matter.
The report said Aakash Educational Services will issue the notes, which will be converted into equity at a discount of 20 per cent to the listing price of the unit’s planned initial public offering.
The fundraising by Aakash will help Byju’s, which is struggling with the delay in its fundraising due to prolonged due diligence process, tide over its liquidity crunch.
The Bengaluru-based company had started conversations with bankers late last year to pick arrangers for Aakash’s IPO, Bloomberg News has reported.
Last month, Byju’s laid off over 1,000 employees. Out of these, 15 per cent staff were in the engineering roles. It also said all freshers had been fired by the company in the latest round of layoffs.
In June 2022, Byju’s had said it would lay off about 2,500 employees across departments to cut costs amid mounting losses. “To avoid redundancies and duplication of roles, and by leveraging technology better, around five percent of Byju’s 50,000-strong workforce is expected to be rationalized across product, content, media, and technology teams in a phased manner,” the company had said.
Byju’s is preparing for the IPO of Aakash Educational Services. The IPO size could be in the range of $1 billion, valuing Aakash at $3.5-$4 billion.
Byju’s acquired Aakash in April 2021 in a cash-and-stock deal of about $950 million, in what was one of the biggest acquisitions in India in the education space. Early last week, Byju’s reported to have raised an unsecured loan of Rs 300 crore ($36.45 million) from Aakash “principal business activities”. The Rs 300-crore loan from Aakash Educational Services Ltd was in effect an advance against the marketing activities and campaigns that Byju’s has been running for Aakash.
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