Shruti Suman
Byju’s is currently engaged in advanced negotiations to sell its US-based children’s digital reading platform to Joffre Capital Ltd. for approximately $400 million. This move is aimed at alleviating Byju’s financial challenges. The potential sale of Epic! Creations Inc. would provide Byju’s with the necessary funds to address a disputed $1.2 billion term loan repayment, according to sources familiar with the matter. Other potential buyers, such as Duolingo Inc., have also expressed interest in acquiring the platform, but wish to remain anonymous as this information is not yet public.
Byju’s is currently in a dispute with its creditors over a missed interest payment on a term loan that was obtained to finance a series of global acquisitions during the pandemic. In September, the startup surprised lenders with a proposal to repay the entire $1.2 billion loan in less than six months through asset sales, as reported by Bloomberg News.
The sale of Epic is being facilitated by Moelis & Co., and a finalized deal could potentially be reached as early as this month. However, no definitive decision has been made, and Byju’s may choose to retain the assets for a longer period, as suggested by the sources.
Representatives for Byju’s, Moelis, and Joffre, a tech-focused buyout firm founded by Chinese dealmakers, have declined to comment on the matter. There has been no response from a representative of Duolingo when asked for their comment.
Byju’s, officially known as Think & Learn Pvt, has been focused on cost reduction to mitigate losses after the online learning boom that occurred during the pandemic started to wane. Once India’s most valuable tech startup, it is currently entangled in a legal dispute with creditors and is facing regulatory scrutiny regarding its financial accounts. The recent financial results for Byju’s parent company, released over the weekend, showed only a marginal reduction in losses, despite the pandemic-driven business growth.
Joffre Capital Ltd.’s founding partners include James Lu, a former executive at Chinese search engine Baidu Inc., according to his LinkedIn profile. He was part of the investor group that acquired the gay-dating app Grindr from Chinese internet company Kunlun Tech Co. in 2020. The firm’s other founders are entrepreneurs and experienced executives in technology and finance, with backgrounds in companies such as Amazon.com Inc., Warburg Pincus LLC, and Goldman Sachs Group Inc., as stated on its website.
