Indian edtech giant Byju's has raised $250 million in fresh funding from New York-headquartered investment firm Davidson Kempner and is close to securing an additional $700 million from existing investors, according to anonymous sources familiar with the matter. The company has maintained its $22 billion valuation over the past year, even as other high-profile startups globally have seen severe corrections in their value. Byju's is using the funds to prepay a portion of its $1.2 billion term loan B and to support the upcoming IPO of its subsidiary Aakash Educational Services Limited.

Byju's, India's largest online education startup, has amassed 150 million users who use its learning app, while hundreds of thousands of students visit the company's brick-and-mortar centers. Byju's prepares students pursuing undergraduate and graduate-level courses and has expanded in recent years to serve all school-going students.

"Byju's is now at that sweet spot of its growth story where the unit economics and the economies of scale both are in its favour. This means the capital that we now invest in our business will result in profitable growth and create sustainable social impact," said Byju Raveendran, co-founder and CEO of Byju's.

"Regardless of the adverse macroeconomic conditions, 2022-23 is set to be our best year in terms of revenue, growth and profitability. Continued support from our esteemed investors re-affirms the impact created by us so far, and validates our path to profitability,” he added.

The funding round comes at a time when several startups in the edtech space, including unicorns, are struggling to cope with mounting losses and slowing expansion plans amid a funding winter. However, Byju's is preparing to list its subsidiary Aakash Educational Services Limited, which it acquired in April 2021 for a cash and stock deal of close to $1 billion.

The COVID-19 pandemic had led to a surge in demand for edtech companies, including Byju's, as people were forced to stay home. However, the appetite for such learning has faltered as life edges back to normal in many places. To combat this, Byju's is redirecting marketing spending to overseas markets where it has created "significant brand awareness."

Byju's has previously raised about $6 billion from venture capital firms, including Tiger Global Management, General Atlantic, and Sequoia Capital. The startup has received a valuation of $11-12 billion by new investors, but did not raise money at that valuation, according to a person directly aware of Byju's fundraising plans. The large financing round in Byju's is expected to result in profitable growth and create sustainable social impact, reinforcing the company's impact in the Indian edtech space. Byju's is expected to continue its growth trajectory and expand its reach beyond the Indian market.