Can we put an end to the #FakeNews that Byju’s is raising $1bn at $22bn valuation!? 😓😓
Break the numbers shared below the headlines, and the beans spill out!
The truth 👇
$1bn is what Byju's is reportedly chasing. Though visibility in the media is all about $950m.
This sum can be broken down into 2 parts 👉
1️⃣ A 3yr $250m convertible debt from Davidson Kempner Capital Management (DKCM) which is not known to invest in startups, but in financially distressed companies against significant equity & big interest rates
2️⃣ A $700m equity fund-raise from the Middle-East
Let’s understand the 1st part in detail & then move to the second one.
The 3yr $250m convertible debt is linked to Aakash Educational Services Limited (offline coaching) which Byju’s acquired for $1bn some time ago.
🔆 Means, if Byju’s fails to repay the debt in 3yrs, whenever Aakash goes for an IPO or a fund-raise, DKCM will be allotted Aakash’s shares at a sig. discounted valuation
🔆 This $250m has not been raised by Byju’s at a $22bn valuation.
To state it clearly, once again 👇
It’s a sum against an agreement that whenever Aakash raises funds next, the lender will be allotted shares at a discounted valuation.
Phew! 🫡🫡
Thus, if anything can be true after that, its that Byju’s is raising the remaining $700m at $22bn valuation! Alas, even that’s false 😓
Let’s break the $700mn equity fundraise.
Byju’s is TRYING to raise an OVERALL sum of $700m.
Of this though, there are 2 parts.
1️⃣ A primary round which will it is TRYING to raise at $22bn valuation
2️⃣ A secondary round which will be raised at <$18bn valuation to give partial/complete exit to select existing investors
Why?
Context: Byju’s raised a massive $1.2bn Term Loan B some time ago.
This loan was linked to the condition that Byju’s valuation must not drop below $18bn mar
🔆 If it does, several strict but undisclosed clauses of the loan would trigger, which will give lenders more control over the company
🔆 Thus, the $700m fundraise is being structured such, that the blended valuation of the primary & the secondary will come down to $18bn
How will this benefit Byju’s and its investors?
🔆 Though the secondary will mean a partial exit for some investors at a lower valuation, the early investors would have made a great return
🔆 Meanwhile, there will be a sum raised at $22bn valuation for the founders to show the world, that Byju’s holds strong and well
🔆 Plus, the lenders of the term loan will be at bay, just as they have been all this while
Meanwhile, there is no guarantee that the $700m will come at all! ❌❌
Byju’s had similarly announced a successful $800m fundraise in 2021, of which $400m never came.
Just, it’s better to wait and watch, than to announce a big win!
The company released its Q4FY23 results some days back. So, I dived in & sliced through its numbers for the last 16 qtrs.
Here is all that I learned 👇
In last 4yrs:
👏 Revenue/month: Rs 85cr | Up ~90%
👏 Profit/month: Rs 25cr | Up ~278%
Just look at those numbers!
How did it happen?
Outstanding jump in paying subscribers:
🔆 72% up in the Top-8 cities (~1.1L users)- 20% up in last 1yr alone
🔆 62% up in the cities with >5L people (~53k users)- 25% up in last 1yr alone
An avg #Rapido rider does ~3 trips a day, earning just Rs 200! 😮😮
What’s his persona & motivation? What does @rapidobikeapp earn out of it?
Here’s all that the company’s data reveals! A thread 👇
This morning, @livemint published a great data-rich story on #Rapido by @sumantbanerji. What did it show? A lot of things. But some key numbers are all that probably matters.