Think and Learn, the parent company of edtech unicorn Byju’s, has raised Rs 300 crore through a collateral-free loan from its wholly-owned subsidiary Aakash Educational Services, at a time when the company is restructuring its operations in order to achieve group-level profitability by March 2023.
According to a statement issued by Byju’s, the Rs 300 crore loan from Aakash is essentially an advance against the marketing activities and campaigns that the edtech unicorn has been running for Aakash.
Byju’s received the unsecured loan from Aakash just a few weeks after announcing a $250 million rights issue with its existing investors, including the Qatar Investment Authority (QIA).
The company is taking a number of steps, including laying off 2500 employees, or 5 per cent of its workforce, as part of cost-cutting measures. There will be layoffs in the sales, content, media, and technology divisions.
Byju’s did not explain why the company took a loan instead of receiving a direct payment for facilitating the offline coaching centre chain’s ‘marketing activities and campaigns.’ In April of last year, Byju’s paid nearly $1 billion in cash and stock for Aakash. The transaction is one of the company’s largest acquisitions to date.
Other plans for the company in coming year include integrating the companies it has acquired over the last three years, reworking its sales machinery, and hiring 10,000 more teachers.
According to the company, the cost cuts will improve unit economics and lay the groundwork for its initial public offering (IPO).
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