New Delhi: The online education provider Byju's, India's most valuable startup, is in advanced discussions to go public through a merger with one of Churchill Capital's Special Purpose Acquisition Companies (SPAC), according to people familiar with the matter.
The startup has held talks with several potential SPAC partners and is farthest along in working out an agreement with Michael Klein's Churchill Capital. Churchill Capital VII raised more than $1.3 billion in an offering in February and trades on the New York Stock Exchange.
Under the preliminary terms discussed, Byju's would raise a total of about $4 billion and seek a valuation of about $48 billion. The startup was valued at $21 billion, according to market research firm CB Insights.
While an announcement could come as soon as January, the negotiations are not final. Byju's or Churchill could still opt out of such a deal, and Byju's could consider an IPO in India next year, the people said.
The Bengalaru-headquartered company, founded and led by former teacher Byju Raveendran, provides K-12 lessons and video material to millions of Indians studying for the country's competitive engineering and medical entrance exams. It also provides one-to-one coding, math and reading classes and material to students in countries in MENA region and Latin America.
Byju's had been aiming to file preliminary documents for a traditional initial public offering as soon as the second quarter of 2022 and was also considering a SPAC merger. In a recent conversation with Bloomberg News, founder Raveendran said the startup is targeting Rs100 billion ($1.3 billion) in revenue in the year ending March 2022, with a 20 per cent margin.
Byju's has been on an acquisition binge in the past year, acquiring startups offering coding lessons, professional learning courses and test prep classes for competitive Indian exams.