In the eye of layoff storm, edtech giant Byju's is in talks with bankers to publicly list its offline coaching unit Aakash Educational Services in the beginning of 2023, according to a person aware of the development.
The wholly-owned subsidiary Aakash is profitable and with its brand presence can be potentially listed, the person said.
The Bengaluru-based firm is looking to raise $800 million to $1 billion in the initial public offering (IPO) of Aakash at a valuation of over $3.5 billion, as per a report by Techcrunch, which first reported the development. The startup may file the paperwork for the IPO as early as February, it added quoting sources.
Byju's declined to comment on the development.
Currently, valued at $22 billion, Byju's has delayed its own IPO planned earlier this year through the SPAC route at a valuation north of $40 billion, due to uncertain macroeconomic conditions.
Last week, Byju’s, run and operated by Think and Learn Pvt. Ltd, raised Rs 300 crore via a collateral-free loan from Aakash against the marketing activities and campaigns the edtech unicorn has been running for Aakash, which continues to function as a separate organization.
In April last year, Byju’s had acquired then Blackstone-backed Aakash in a cash-and-stock deal for close to $1 billion. The deal stands as one of the biggest acquisitions by the company so far.
The 34-year-old company Aakash runs a chain of physical coaching centres across India. Prior to the acquisition, the firm was planning to list in the country. Aakash, which has been profitable for years, is on track to clock a revenue of over $500 million by the financial year ending 2024, at a margin of 25%, the Techcrunch report said.
Meanwhile, Byju’s is taking several cost-cutting measures including laying off 2500 employees or 5% of its workforce. The layoffs are planned across the sales, content, media, and technology divisions.
Earlier this week, founder and CEO Byju Raveendran wrote to employees seeking forgiveness for the same. The edtech giant also went back on its decision to shut down its office in Technopark in Trivandrum and hire back the employees who were laid off.
Its losses jumped 20x for the 2020-21 fiscal year to Rs 4,589 crore on a revenue of Rs 2,428 crore.
The Bengaluru-headquartered company recently raised $250 million in a rights issue from its existing investors including Qatar Investment Authority (QIA).
Besides, some of the other marquee investors include Chan-Zuckerberg Initiative, Sequoia Capital India, Silver Lake, BlackRock, Sands Capital Management, Alkeon Capital Management, Sofina, Verlinvest, Tencent, Naspers Ventures, Canada Pension Plan Investment Board (CPPIB), General Atlantic, Tiger Global, Lightspeed Venture Partners, Times Internet, Aarin Capital, IFC and Owl Ventures.
