Qatar sovereign fund likely to invest $200-250 million in Byju's

Byju’s is closing a $200-250-million funding round from Qatar Investment Authority (QIA), the sovereign wealth fund of the West Asian nation, another proof of the home-grown education technology company’s growth prospects. The deal will mark QIA’s first direct investment in an Indian start-up.
 
Sources directly familiar with the deal said the term-sheet had been signed between the two parties, and the deal will see QIA acquiring less than 5 per cent stake in the Bengaluru-based start-up. It could not be ascertained whether any of the existing investors are making secondary stake sale.
 
A spokesperson of Byju’s declined to offer any comment on the story while QIA could not be reached for its comments. In March, Byju’s had raised $540 million at a valuation on $5.4 billion, making it the most-valued ed-tech company in the world. Early investor Sequoia Capital had sold part of its stake for $190 million, while Times Internet, another early investor, also pared some of its stake in that round, according to sources.
 
The QIA deal follows Byju’s raising money from the Canada Pension Plan Investment Board (CPPIB), which was also the first direct investment by the Canadian pension fund in an Indian start-up. CPPIB is an active investor in the realty space in India, while it has also backed companies such as ITC, HUL, and Kotak Mahindra Bank, among others.

*May be less as these investors have sold some shares in secondary market Source: Tracxn

QIA is one of major shareholders in Airtel, having invested $1.2 billion in the publicly traded telecom major in 2013. More recently, it invested $300 million in office space developer RMZ Corp and is said to be considering investments in the affordable housing space.
 
Sovereign funds are known to be long-term investors and typically invest in traditional sectors like realty, financial services and public markets. For that reason, the investment by QIA denotes a shift in strategy.
 
In December, QIA Chief Executive Officer Mansour Ibrahim al-Mahmoud told a news agency that the fund was considering investing in technology companies, start-ups, and tech-focused venture capital firms.
 

With a direct investment in Byju’s, a tech start-up, QIA is also entering the turf of Saudi-funded SoftBank, which has infused $10 billion into the Indian technology space. Qatar and Kingdom of Saudi Arabia are not the best of friends.
 
Through successive large round, Byju’s valuation surged over five times through 2017-18 alone. The eight-year-old start-up also hit profitability in FY19. It did not disclose the profit it registered but sales in the period were Rs 1,430 crore.
 
With a sizeable footprint in India, where it sells K-12 and test preparation courses on the app, Byju’s is preparing to launch in the US in a big way. It recently acquired interactive learning start-up Osmo for $120 million. Byju’s is said to be building out its US presence on the back of Osmo’s workforce and network of customers.