Byju's lessons earn Aarin Capital ten-fold return

BENGALURU: Aarin Capital, the proprietary investment vehicle of former Infosys finance chief Mohandas Pai and Manipal Group scion Ranjan Pai, has made a more than 10-fold return from its early investment in education tech firm Byju’s.

The firm sold a 6-7 per cent stake in Byju’s to Silicon Valley venture capital firm Lightspeed Venture Partners in February, in a transaction pegged close to Rs 150 crore. It marks one of the most attractive returns in the venture capital industry this year.

Aarin Capital declined to comment on the specifics of the deal. "We made a very healthy return," Deepak Natraj, who heads Aarin Capital, told ET. With this deal, it has sold a majority of its stake in the Bengaluru-based startup where it first invested in early 2013. According to filings made with the Registrar of Companies, Aarin Capital had acquired shares in Byju’s at Rs 946.51 to Rs 992.63 each.

The February round, when Aarin Capital was one of the selling shareholders, was done at Rs 11,101 a share. The round of Rs 499 crore valued Byju’s at more than Rs 2,400 crore, and also saw investments from Sequoia Capital and Belgium’s Sofina. ET had first reported about Sequoia investing in Byju’s in June 2015. Byju’s has been one of the few firms that have continued momentum in 2016. It is currently raising a new round of around Rs 325 crore. World Bank arm International Finance Corporation is expected to put in Rs 100 crore as a part of this round, with participation from other investors as well.

Byju’s caters to school students in classes six to 12 and helps students prepare for competitive entrance examinations as well through a combination of original content, watch-and-learn videos, animations and interactive simulations.

While the company had started with an offline model, over the last couple of years, it has transitioned to education technology business with most of the revenue now coming from online, especially through smartphone application.