The board of edtech Think & Learn, which operates Byju's, has approved the initial public offering (IPO) of Aakash Educational Services. The much-touted IPO for its tutoring services division was previously planned for 2023, which was postponed as the edtech decacorn battled various challenges. 

After granting its official sanction for public listing, the company's board will soon appoint merchant bankers who will undertake the upcoming IPO, the company said in a statement on 5th June 2023. It added that Aakash is expected to register Rs 4,000 crore in revenue in FY24 with Rs 900 crore in earnings before interest rate depreciation and amortisation (EBITDA). 

Byju's appointed Ajay Goel as its chief financial officer (CFO) in April 2023 to strengthen its financial operations and achieve profitability amid myriad of problems. 

Start-Up Sector's Poster Child 

Over the years, Byju's valuation kept rising with each funding round. It was valued at $3.37 billion in September 2018, $5.47 billion in March 2019, $8.24 billion in January 2020, $11 billion in June 2020, and $16.09 billion in March 2021. With the inflow of capital, the company embarked on an aggressive acquisition spree, nationally and globally.

This started with Vidyartha and TutorVista in 2017, followed by American brand Osmo for $120 million in 2019 and WhiteHat Jr for $300 million in July 2020. In April 2021, it acquired Byju's acquired Aakash in April 2021 in a $900 million deal. Three months later, it bought Great Learning and Epic for $600 million and $500 million, respectively. 

By August 2021, Byju's valuation touched a whopping $50 billion, and in December, it was reportedly considering going public via a special purpose acquisition company (SPAC) deal at a $48 billion valuation.  

However, as the macro and micro environment in the edtech space catapulted following the resurgence of offline education in the post-pandemic months, the company decided to shelve plans to take Byju's public. Instead, it started considering Aakash's IPO as a safer bet. This was based on the premise that the test prep segment, especially for medical and engineering courses, will continue to find favour in the hybrid education spectrum.

Around this time, the funding winter set in, making it more challenging for the edtech to raise funds at the same scorching pace it had set earlier. It started pruning costs to stem its losses as it faced several headwinds; PTI reported that the company's losses widened to Rs 4,589 crore in FY22 from Rs 232 crore in FY21. 

Battling Headwinds

Once lauded as India's most valued start-up, Byju's, was recently in the news for all the wrong reasons. From laying off around 3,500 people to cutting costs, intense scrutiny over its accounting practices, its 18-month delay in filing its FY21 results, and overspending on its marketing, the tide seemed to have been against the decacorn.

As if that was not enough, earlier this year, some of its early investors, including Lightspeed Investment Partners and Chan Zuckerberg, were reportedly seeking buyers to sell their respective stake of 2.4 per cent in the edtech decacorn. 

In April 2023, BlackRock, which has less than 1 per cent in Byju's, slashed the value of its investment by nearly 50%. The US-based asset manager pegged its per-share value at $2,400 in December 2022, down from $4,600 in April 2022. 

Earlier this month, the Enforcement Directorate (ED) searched the three premises of Byju Raveendran, the edtech's founder and chief executive officer, as part of its Foreign Exchange Management Act (FEMA) probe. 

Recently, Byju's raised $250 million from Davidson Kempner Capital Management, a US-based investment firm, as part of an ongoing $1 billion funding round that the Indian edtech giant is looking to close by this month-end.

The funding from Davidson Kempner will help the edtech decacorn prepay a part of the $1.2 billion term loan B raised in 2021. According to a report by the global news agency Bloomberg, Byju's is also facing a deadline from investors to make a quarterly interest payment of $40 million on a $1.2 billion loan it raised in November 2021. If the edtech firm fails to meet the deadline by 5th June 2023, it will default on the loan, adding to its growing mounds pile of fiscal woes.