The Bengaluru-based company has held talks with both Santa Clara, Calif.-based Chegg and Lanham, Maryland-based 2U and the total value of the deal could be around $2 billion, said the people, who asked not to be named. Sensitive nature of negotiations. Chegg had a market value of $2.3 billion as of the end of Friday, while 2U had a market value of $756 million and more than $1 billion in debt and other liabilities.
One person said Byju’s and its bankers are evaluating the financials of both companies and aim to make an offering in the coming weeks. People said they had yet to agree on a final price and it was possible that no deal would materialize eventually.
Byju’s declined to comment, while Chegg and 2U did not respond to requests for comment.
The Cheg closed 2.9% higher on Monday after rising 12%, while 2U ended up 6.8% after climbing 24%.
Byju’s, one of the world’s most valuable startups, with the backing of Tiger Global Management and Mark Zuckerberg’s Chan Zuckerberg Initiative, is seeking to capitalize on the worldwide market avenues and build its business through acquisitions, among others. One said. Chegg and 2U have both seen their shares fall by more than 75% from July to Friday’s market close.
Find stories that interest you
According to market researcher CB Insights, the Indian education pioneer is the country’s most valuable startup with a valuation of $22 billion. Its backers also include Silver Lake Management, Naspers Ltd. and Mary Meeker’s Bond Capital.
Byju’s, which has a parent company and is formally known as Think & Learn Pvt, has already raised over $1 billion to finance acquisitions from banks including Morgan Stanley and JPMorgan Chase & Co and Goldman Sachs Group Inc. have met conditional loan commitments of more than Rs. People. Bank representatives declined to comment.
Bloomberg News reported last week that the company was in talks with lenders to raise more than $1 billion in acquisition financing.
Byju’s, founded in 2015 by former teacher Byju Raveendran, is already leading a consolidation wave in online education. Over the past year, it bought US reading platform Epic for $500 million, Singapore-based service Great Learning for $600 million, US coding site Tynker for $200 million and Austrian math operator GeoGebra for about $100 million.
“We’re Seizing the Opportunity to Build a Huge” edtech Company to the world,” Raveendran told Bloomberg News last year.
A deal for Chegg or 2U would further accelerate Byju’s growth by providing access to millions of students in the lucrative higher education segment.
Founded in 2005 by a group of Iowa State University students, Chegg started as a low-cost textbook rental service for college students. It then raised $187 million in an initial public offering in 2013 and geared up for online research and teaching.
Chegg was one of a crop of pandemic-era darlings, from Peloton Interactive Inc. to Zoom Video Communications Inc., which soared in 2020 after investors bet on fundamental changes in consumer behavior. But the edtech firm, which competes with Coursera Inc., after shrinking enrollments and accelerating US economic growth in 2021, prompted Chegg to cut its revenue forecast and warn about an uncertain growth outlook.
2U, founded in 2008, is the parent of online learning platform edX. The company supplies equipment for designing and providing e-learning courses to universities around the world.
Byju’s also plans to make its own way to the public markets. The Indian edtech startup is in talks with several special purpose acquisition companies, or SPACs, about a potential US listing, which is still under consideration, people said.