Byju closes $1 billion round amid startup funding winter

In a massive $1 billion funding round, Byju's, the world's most valuable edtech company, will raise equity and structured instruments at its current valuation of $22 billion, making it one of the largest funding rounds in recent history as well as boosting the company amid regulatory scrutiny.

In a sense, the potential fundraising will vindication for Byju's founder and CEO, Byju Raveendran, as the Enforcement Directorate (ED), the Indian financial investigation agency, has conducted searches at its offices under the Foreign Exchange Management Act (FEMA).

India's startup ecosystem is also experiencing one of the worst funding winters in recent times, with some of the most prolific investors cutting their bets by more than 80%. In addition, investors have become extremely cautious about edtech companies since the pandemic has decreased demand for online learning.

Approximately $700 million of the $1 billion funding round will be raised through equity, and one of the three Middle East-based sovereign funds has advanced talks to lead the round.

It is in advanced talks with US-based asset management companies Oaktree Capital Management, Apollo Management, and Davidson Kempner Capital Management to raise the remaining $300 million via structured instruments, the people said.