[Funding alert] Edtech major BYJU's plans to raise $1.2B through term loan

BYJU's, the most valuable edtech startup in India, is planning to raise $1.2 billion through a term loan from overseas investors, given the favourable interest rates prevailing in the markets.

The edtech unicorn, last valued at around $18 billion during a funding round in October 2021, is aiming to raise a minimum of $500 million through a Term Loan B (TLB) borrowing in the US. However, the round size was increased, according to reports.

TLB typically have a floating interest rate with a tenure of around five to seven years.

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BYJU's has been engaged with global banks, including Morgan Stanley and JP Morgan, for the structuring of TLB. It is also in talks with Blackstone, Fidelity, and GIC for the term loan.

It is likely to deploy the fresh round of capital for inorganic activity and towards working capital requirements.

The edtech startup is quite active on the acquisition front. This year, BYJU's has made nine buyouts both in the country and overseas, spending close to $2.5 billion to acquire these businesses.

While it has acquired Aakash Educational Services, Great Learning, etc., in India, in the US market, it has bought Epic and Tynker.

These developments come at a time when the edtech major is reportedly looking to go public, and this could come at a steep valuation. Reports indicate BYJU's could be looking at a valuation of $21 billion in its next round of funding.

However, BYJU's is not the first Indian startup to raise funds through a TLB route. Earlier in July, hospitality unicorn OYO raised debt funding worth $660 million from global institutional investors, including Fidelity Investments.

The edtech unicorn has over 100 million registered students and around 6.5 million paid subscribers.