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Abu Dhabi’s sovereign wealth funds in talks for BYJU’S $500 million fundraising

According to people aware of the development, Abu Dhabi’s sovereign wealth funds are actively negotiating with Think and Learn Pvt Ltd, the parent company of Byju’s, to participate in the $400-500 million fundraising the company is planning.

Sources claim that the Qatar Investment Authority (QIA), which had been in advanced negotiations to invest $250–350 million in the edtech startup, has not yet made a decision. In comparison to the $22 billion the corporation had requested in its previous round, it intended to invest at a 40–50% discount.

The financial reports for the fiscal years ended March 2021 and 2022 have not yet been filed by Byju’s.

The company has informed lenders and debt investors that it expects to finalise its audited financial reports for FY21 by September 6, which have been approved by its official auditor Deloitte. Any investment made before the business releases its financial results may cause suspicion, according to analysts.

According to sources close to the business, potential Byju investors have two choices: they either invest as equity investors at a $22 billion valuation or choose a convertible pre-IPO instrument with a 20% discount to an IPO valuation band. The band’s floor is $22 billion, and its maximum is estimated to be $35 billion. The valuation discount would increase every six months if the timeline for the IPO were to be postponed.

“Byju is in talks with the royalty at UAE,” said one of the persons cited above. “They are keen on India and the edtech story. ADQ is also an existing investor, so there is comfort. It’s not yet clear which Abu Dhabi investment vehicle will come in. It’s possible this round will be led by International Holding Company (IHC).”

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