Struggling Indian edtech firm BYJU’S is reportedly in advanced negotiations to sell its US-based children's digital reading platform, Epic, to Joffre Capital Ltd. for approximately $400 million, according to a report by Bloomberg on Monday. This potential sale is seen as a means for BYJU’S to raise capital to address its $1.2 billion term loan. Additionally, the language learning application, Duolingo, has expressed interest in acquiring the platform from BYJU’S.
The sale process for Epic is being managed by dealmakers Moelis & Co., with the deal possibly reaching finalization as early as this month, as reported.
It's worth noting that Business Today has not independently confirmed this development.
BYJU’S acquired Epic for $500 million in 2021 as part of its global expansion. The US-based edtech platform offers an extensive collection of over 40,000 books through its online platform, as detailed on its website.
BYJU’S and its creditors are currently embroiled in a dispute over missed interest payments on its Term Loan B.
The company released its fiscal year 2021-22 results over the weekend, following a year-long delay. The company reported revenue of Rs 3,569 crore and an EBITDA (earnings before interest, taxes, depreciation, and amortization-based) loss of Rs 2,406 crore for the year.
BYJU’s has been under scrutiny from both investors and regulators. Just prior to the results announcement, the company's Chief Financial Officer, Ajay Goel, resigned. In addition, Deloitte, the company's auditor, had resigned earlier in the year, citing a 'significant impact' on its ability to audit the company due to BYJU'S failure to provide financial data despite repeated requests.
Furthermore, there were allegations in June that the edtech company had not been remitting provident fund dues to EPFO that it had been collecting from employees. The EPFO initiated an investigation into the company, leading BYJU’S to deposit the employee dues.
In June of the same year, Peak XV Partners (formerly known as Sequoia India), Prosus, and the Chan Zuckerberg Initiative announced the resignation of their representatives from the board of the edtech company, BYJU'S.
