Today, let us talk about funding. We all know, that during the COVID 19 lockdown, there was negligible news of funding and other news of startups. The economy during that time was at still, with nothing major happening. There were no customers and businesses were not operating because of the lockdown imposed nationwide.
There were two fears among the people at that time- one was the fear of contracting with coronavirus and the second was what would happen if the lockdown is imposed for a long time. How will people survive with no money floating and entering their households?
That period was dreadful and scary, but thankfully now the economy has been opened up and we daily hear some pieces of news which tell about the funding, or mergers and acquisitions, or takeovers, or entry of a startup into a unicorn club.
Why do startups need funding?
There are many rounds of funding that a startup undergoes. The different types of funding are Pre Seed Funding, Seed Funding, Series A, B, C funding. Thanks to the funding, that small startups Amazon, Facebook, Apple grew into the biggest tech giants of the world. External funding is the money received from the external or outer source in return for stock or share of the startup.
The reasons why startups need funding are-
1. For Establishment purposes, for setting up the organization, meeting all the needs
2. For Research purposes, for activities to explore the new products, customer demand.
3. For product and market development purpose
4. For expansion and growth purposes, for hiring, and for development and distribution
5. For purchasing of assets like manufacturing pieces of equipment, patents, inventory.
6. For paying off loans
Funding of Byju’s
Recently, an edtech startup was in the headlines because of the funding it is going to receive. The startup, Byju’s will be receiving a funding of USD 296 million which is equal to INR 2200 Cr, as announced on October 04, 2021.
This round of funding was led by Oxshott Venture Fund. The other participants of this round of funding will be Edelweiss, Veriton Fund, XN Exponent Holdings, and Market X Ventures. This round of funding will be part of the ongoing Series F round of funding.
The startup will be allotting a total of 77,174 Series F compulsory convertible cumulative preference shares (CCPS) at a premium price of INR 2,85,062. Oxshott Venture Fund will be investing INR 1,200 Cr for 42,905 shares of Series F CCPS.
Edelweiss will be investing INR 345 Cr and IIFL will be investing INR 111 Cr. Veriton Fund will be investing INR 47 Cr, XN Exponential Holdings will be investing INR INR 150 Cr, and MarketX Ventures will be investing INR 144 Cr.
The startup, last had raised USD 150 million in a round of funding which was led by Asmaan Ventures and ARC Ncore and was then valued at USD 16.5 billion. The startup is now planning to raise around USD 1.5 billion and with a valuation of USD 20-USD 21 billion.
About the startup
Founded in the year 2011 in Bengaluru, Byju’s is an Indian multinational educational technology company. The founders of the startup are Byjuu Raveendran and Divya Gokulnath. The subsidiaries of the startup are Osmo, Tutor Vista, HashLearn, WhiteHat Jr, LabLnApp, Scholr, Aakash Institute, Toppr, Whodat, Tynker, Epic! Great Learning, BYJU’S Exam Prep.
The history of the startup is as follows-
In the year 2015, the startup launched Byjus: The Learning App.
In the year 2017, it launched Byju’s Math App for kids and Byju’s Parent Connect App.
By the year 2018, it had 15 million users and 900,000 paid users.
In July 2019, it won the rights of sponsorship for the Indian Cricket Team jersey, replacing Oppo.
It recently acquired Tynker, which is US Based coding platform in a stock and cash deal.
The startup has acquired around 15 companies since its foundation in the year 2011 and has spent more than USD 2 billion in the past few months on the acquisitions.
Earlier in the year 2021, it also acquired Aakash Educational Services for the year at USD 1 billion. This is said to be the most expensive acquisition in the Indian history of the edtech industry.
It has spent around USD 400 million in the professional skilling and lifelong learning segment.
In August 2021, it introduced a two-teacher model on the platform.
This year only, it made expansions through “Future School” in markets like Brazil, Indonesia, UK, USA.
Currently, according to the startup, it has 50 million registered students, and 3.5 million paid subscriptions.
About the investor- Oxshott Venture Fund
Oxshott Capital LLC is a family-based independent boutique investment banking and advisory firm. It focuses on a deep relationship around the globe including Asia and the Middle East to source proprietary strategic and investment opportunities.
The Managing Director of Oxshott Capital LLC is Erne Stern who is an alumnus of Fairleigh Dickinson University.
About Byju Raveendran
Born in Kerala, Byju Raveendran is an Indian entrepreneur and educator, and the co-founder of Byju’s. He is a Btech graduate from Government College of Engineering, Kannur. According to Forbes in the year 2020, the combined wealth of him, his wife, and his brother was USD 3.05 billion.
The awards and honors under his name are-
In the year 2019, he received the Manorama News Newsmaker award
In the year 2020, he was the finalist of Ernst &Young, Entrepreneur of the Year, India, and winner of Business Transformation, India.
He has been on the list of Fortune Magazine 40 Under 40.
In the year 2021, he has received the Forbes India Leadership Award (FILA) Entrepreneur of the Year.
The startup is growing tremendously and is succeeding. We wish the startup a stroke of good luck and a bright and long future.
Edited by Sanjana Simlai.
