Troubled Byju's, an Indian education provider, is in advanced talks with Joffre Capital Ltd. to sell its US-based kids' digital reading platform for around $400 million to relieve financial concerns. According to persons acquainted with the situation, the sale of Epic! Creations Inc. would assist Byju in obtain funds to pay off a disputed $1.2 billion term loan. Other bidders, including Duolingo Inc., have expressed interest in purchasing the platform, according to the sources, who asked not to be identified because the information isn't public.
Byju's and its creditors are at odds over a delayed interest payment on a term loan taken out by the firm to assist finance a global acquisition spree during the pandemic. Bloomberg News reported in September that the firm had presented a surprise repayment plan to lenders to return the whole $1.2 billion loan in less than six months through asset sales.
Epic is being sold by Moelis & Co., and a deal could be finalized as soon as this month, according to sources. According to the sources, no final decision has been made on the deal, and Byju's may decide to maintain the assets for a longer period of time. Representatives for Byju's, Moelis, and Joffre, a Chinese-founded tech-focused buyout firm, declined to comment. A Duolingo representative did not respond to a request for comment.
As part of its global growth, India's online education pioneer purchased Epic for $500 million in 2021. According to its website, the US firm, which was created roughly a decade ago, has a library of more than 40,000 books on its online platform.
Byju's, formally known as Think & Learn Pvt, has been attempting to cut costs in order to reduce losses after a pandemic-era surge in online learning faded out. It was once India's most valued IT firm, but it is now embroiled in a court dispute with creditors and under regulatory scrutiny over its financials. Over the weekend, Byju released its first earnings in years, revealing that losses at its parent company narrowed just modestly despite a pandemic-era sales surge.
According to his LinkedIn page, one of Joffre's founding partners is James Lu, a former executive at Chinese search engine Baidu Inc. In 2020, he was a member of the investing group that purchased the gay-dating app Grindr from Chinese internet giant Kunlun Tech Co. According to the company's website, other founders include entrepreneurs and seasoned executives in technology and finance who have held senior roles at Amazon.com Inc., Warburg Pincus LLC, and Goldman Sachs Group Inc.