ETtechMumbai: Byju’s, India’s highest valued startup, has raised $1.2 billion via a term loan from overseas markets, three sources with knowledge of the development said.
The edtech unicorn had earlier planned to raise $700 million, but the round was upsized with recommitments due later today. The company has taken advantage of the interest rate arbitrage available in global markets, with record low rates. It has raised capital at a rate of Libor + 550 basis points, much lower than what’s available in domestic markets. Libor, or London interbank offered rate, is the benchmark at which overseas interest rates are set.
Byju’s is working with American investment banks JPMorgan and Morgan Stanley to structure the term loan.
“The historic success of Byju’s TLB (Term Loan B, also called an institutional term loan), as the largest unrated TLB from India and Asia as well as one of the largest unrated TLB globally in history, reflects the strong credit story of the company as one of the largest and fastest growth global edtech platforms,” said Kamal Yadav, managing director at Morgan Stanley.
Byju’s plans to use the term loan proceeds to fund general corporate purposes, offshore only, including to support business growth in North America and fund potential inorganic growth opportunities.
The company has spent more than $2 billion on acquisitions over the past few months, triggering consolidation in an industry that has gained due to the pandemic. In July, it acquired US-based kids learning platform Epic in a $500-million cash-and-stock deal. It also acquired professional and higher education platform Great Learning for $600 million in a cash-and-stock deal. It had previously acquired coaching institute Aakash Institute and online coding classes provider Whitehat Jr.
Earlier this year, Byju’s expanded in overseas markets through its ‘Future School’ offering in the US, UK, Brazil, Indonesia and Mexico. “The company is looking at entering the North American market and will be announcing another strategic investment soon,” said another person with knowledge of the development.
A company spokeswoman declined to comment.
The edtech unicorn had earlier planned to raise $700 million, but the round was upsized with recommitments due later today. The company has taken advantage of the interest rate arbitrage available in global markets, with record low rates. It has raised capital at a rate of Libor + 550 basis points, much lower than what’s available in domestic markets. Libor, or London interbank offered rate, is the benchmark at which overseas interest rates are set.
Byju’s is working with American investment banks JPMorgan and Morgan Stanley to structure the term loan.
“The historic success of Byju’s TLB (Term Loan B, also called an institutional term loan), as the largest unrated TLB from India and Asia as well as one of the largest unrated TLB globally in history, reflects the strong credit story of the company as one of the largest and fastest growth global edtech platforms,” said Kamal Yadav, managing director at Morgan Stanley.
Byju’s plans to use the term loan proceeds to fund general corporate purposes, offshore only, including to support business growth in North America and fund potential inorganic growth opportunities.
The company has spent more than $2 billion on acquisitions over the past few months, triggering consolidation in an industry that has gained due to the pandemic. In July, it acquired US-based kids learning platform Epic in a $500-million cash-and-stock deal. It also acquired professional and higher education platform Great Learning for $600 million in a cash-and-stock deal. It had previously acquired coaching institute Aakash Institute and online coding classes provider Whitehat Jr.
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Earlier this year, Byju’s expanded in overseas markets through its ‘Future School’ offering in the US, UK, Brazil, Indonesia and Mexico. “The company is looking at entering the North American market and will be announcing another strategic investment soon,” said another person with knowledge of the development.
A company spokeswoman declined to comment.