Byju's IPO: Bankers Pursue $50 Billion Valuation

Investment Banks Pursue Byju’s IPO

A significant number of leading investment banks are actively courting Byju’s, India’s most highly valued startup, and encouraging it to consider a public offering as early as the coming year.

Valuation Estimates

The majority of banks have presented Byju’s with potential valuations ranging from $40 billion to $45 billion. However, some, notably Morgan Stanley, have suggested a valuation of $50 billion should the company proceed with a listing in the next year, according to sources familiar with the discussions.

Currently, Byju’s was last valued at $16.5 billion, despite having secured $1.5 billion in funding since the onset of the pandemic last year.

Growing Appetite for Consumer Tech Stocks

This heightened interest from banks is fueled by the recent positive reception of consumer technology stocks in the Indian public market. The successful $1.3 billion initial public offering (IPO) of food delivery service Zomato last month has demonstrated a strong investor appetite.

Several other prominent startups, including Paytm, PolicyBazaar, Nykaa, Ixigo, and MobiKwik, have already submitted the necessary documentation for their own IPOs.

Byju’s IPO Timeline

Byju Raveendran, founder and CEO of the company, has previously indicated a potential listing within two to three years. However, a senior executive, requesting anonymity due to the confidential nature of the matter, and an investor have stated that no firm timeline for an IPO has been established.

Potential for Further Funding

In the near term, Byju’s is likely to secure additional funding. The company has reportedly received numerous inquiries from investors interested in participating in a round valuing the startup at approximately $21.5 billion.

Strategic Acquisitions

Byju’s has strategically utilized recent funding rounds to acquire several companies. Notably, it acquired Aakash, a leading coaching center with over 200 locations, for nearly $1 billion earlier this year.

Other acquisitions include Great Learning and U.S.-based Epic, totaling over $1 billion in cash and stock transactions.

Expanding Educational Reach

Byju’s caters to students preparing for undergraduate and graduate-level studies. The platform has also broadened its offerings to encompass all school-aged students.

Innovative teaching methods are employed, with tutors utilizing everyday objects like pizza and cake to explain complex concepts.

Pandemic-Driven Growth

The COVID-19 pandemic, and the resulting nationwide lockdowns and school closures in New Delhi, significantly accelerated Byju’s growth, alongside other online learning platforms such as Unacademy and Vedantu.

User Base and Revenue Projections

As of early 2021, Byju’s reported over 80 million users, with 5.5 million being paying subscribers. The company was profitable in 2019.

Revenue is projected to reach $300 million in the U.S. this year, according to Raveendran, and potentially $1.1 billion globally by the end of the calendar year, as stated by a source with knowledge of the financial details.

Byju’s has not provided any official comment on these matters.