Byju’s Nears $400 Million Deal to Sell US Unit Epic to Joffre

Indian education provider Byju’s is currently in advanced discussions to sell its US-based kids’ digital reading platform, Epic! Creations Inc., for approximately $400 million to Joffre Capital Ltd. This move is aimed at alleviating Byju’s financial pressures.

The sale of Epic! would enable Byju’s to raise funds to repay a disputed $1.2 billion term loan. Sources familiar with the matter disclosed that other potential buyers, including Duolingo Inc., have also shown interest in acquiring the platform. However, these sources requested anonymity since the information has not been made public yet.

Byju’s has been entangled in a conflict with its creditors due to a missed interest payment on the term loan, which the startup had obtained to support its global acquisition spree during the pandemic. In September, Bloomberg News reported that Byju’s had proposed a surprising repayment plan to lenders, suggesting the complete repayment of the $1.2 billion loan within six months through asset sales.

The sale process for Epic! is being managed by Moelis & Co., and a final agreement could be reached as early as this month. Nevertheless, the sources emphasized that no definitive decision has been made, and Byju’s could choose to retain the assets for a longer period.

Representatives for Byju’s, Moelis, and Joffre, a tech-focused buyout firm founded by Chinese dealmakers, declined to comment on the matter. A representative for Duolingo did not respond to a request for comment.

Byju’s, also known as Think & Learn Pvt, has been striving to reduce losses by cutting costs after the online learning boom during the pandemic subsided. Once considered India’s most valuable tech startup, the company is currently embroiled in a legal battle with creditors and is facing regulatory scrutiny regarding its financial accounts. Byju’s recently released its first results in years, revealing that the parent company’s losses only marginally narrowed despite the surge in business during the pandemic.

Joffre Capital was founded by James Lu, a former executive at Chinese search engine Baidu Inc., according to his LinkedIn profile. Lu was part of the investor group that acquired gay-dating app Grindr from Chinese internet company Kunlun Tech Co. in 2020. Other founders of Joffre Capital have extensive experience in technology and finance, having held senior positions at companies such as Amazon.com Inc., Warburg Pincus LLC, and Goldman Sachs Group Inc., as stated on the firm’s website.