India’s Biggest Startup: Byju’s Can Launch IPO At Rs 3.6 Lakh Cr Valuation! How Will This Work Out?

Edtech platform and India’s most valuable startup Byju’s is in advanced stages of talks to go public in the US via merger with one of Churchill Capital’s special-purpose acquisition companies (SPAC).

It is also considering an additional listing in India at a later stage if the deal falls through.

Valuation Almost Doubled

It also held talks with other potential SPAC partners, but is the farthest along with Michael Klein’s Churchill Capital.

Under the preliminary terms, Byju’s would raise about $4 billion and seek a valuation of about $48 billion which would make it the most valued privately held startup in India.

The negotiations are not final and either Byju’s or Churchill could still opt out of such a deal, and the former could float an IPO in India next year.

It was earlier valued at $21 billion in November after securing the first tranche of its intended $1.5 billion from investors.

Why The Crazy Valuation?

The company’s current revenue run rate is $1.5 billion which is projected to grow to $3 billion by 2023.

The whopping valuation is typical of Indian startups which are valued at 18-20 times GMV (Gross Merchandise Value).

But the final valuation would depend on financial results and investor demand.

What SPACs Do

A merger is required since India-headquartered companies can’t go public through conventional IPOs in the US.

An SPAC, aka a blank check firm, is used to go public in the US since they are publicly listed investment vehicles that have no operations and are formed with the intention of merging with a private company.

Byju’s is aiming at a listing in the US since a large part of its business is in that country.

Expansion Outside India

It is also looking to become one of the largest players in the space in the US with a target of  $1 billion in revenue in the next three years.

It has acquired US-based Tynker, a leading K-12 creative coding platform and US-based digital reading platform Epic, among others.

It is also making big inroads in other global markets such as the UK, Brazil, Indonesia and Mexico where it provides one-to-one coding, math and reading classes and material to students.