Byju's In Advanced Talks To Sell US-Based Kids' Reading Platform For $400 Million

Struggling education provider Byju's is currently engaged in advanced negotiations to divest its US-based children's digital reading platform for a sum of approximately $400 million, with Joffre Capital Limited identified as the potential buyer.

This move is aimed at alleviating the financial pressures that Byju's currently faces.

Byju's has been grappling with a contentious $1.2 billion term loan, the subject of a dispute with its creditors, who have raised concerns about a missed interest payment.

This loan was initially secured to facilitate a robust global acquisition strategy undertaken during the pandemic.

In an unexpected turn of events, Byju's put forth a proposal to its lenders, suggesting a rapid repayment of the entire $1.2 billion loan within a span of less than half a year, predominantly through asset sales.

This proposal was reported by Bloomberg News back in September.

Moelis & Co. is overseeing the sale process for Epic! and there is the potential for a deal to be concluded as early as this month, though no final decision has been made on the matter.

Byju's may choose to retain ownership of the assets for a longer period.

Various other bidders, including Duolingo Inc., have also exhibited interest in acquiring the platform, but they have requested anonymity as this information is not yet public.

Byju's, formally known as Think & Learn Pvt had acquired Epic! for $500 million in 2021 as part of its broader global expansion strategy.

Epic!, established around a decade ago, offers an extensive collection of over 40,000 books on its online platform.

Byju's, once hailed as India's most valuable tech startup, has been diligently working to curtail costs and mitigate losses after the initial surge in online learning during the pandemic subsided.

Presently, the company finds itself entangled in a legal dispute with creditors and is contending with regulatory scrutiny concerning its financial accounts.

In the recent financial report released by Byju's, it was revealed that losses at the parent company only witnessed a marginal reduction, despite the surge in business during the pandemic.

Joffre Capital Ltd., a tech-focused private equity firm initiated by Chinese dealmakers, boasts founding partners such as James Lu, a former executive at Chinese search engine Baidu Inc., who was part of the investor group that acquired the gay dating app Grindr from Chinese internet company Kunlun Tech Co. in 2020.

Other founders have substantial experience in technology and finance, having held senior positions at prominent entities like Amazon.com, Inc., Warburg Pincus LLC, and Goldman Sachs Group Inc.