Sequoia makes 11X returns via secondary share sale in Byju's fundraise

2018 has been the year full of secondary share sales, and in BYJU’s latest round of humongous fundraise, Sequoia Capital has made sure to continue the trend.

As per several reports, the Silicon Valley-based venture capital firm has sold a partial stake for $185-190 million in the $540 million funding round led by Naspers, where the edtech company’s valuation stood at $3.6 billion.

General Atlantic and Naspers had picked up 7 per cent stake from Sequoia earlier at a $2-2.5 billion valuation.

Prior to this transaction, Sequoia had poured in $50 million in the company overall, owning about 20-22 per cent of stakes. Now, the secondary share sale has reduced the stake to 13-15 per cent, which is still the largest stake after the founders of the company Byju Raveendran along with his brother and wife, who own 38 per cent.

Looking at these facts, Sequoia seems to have made approximately 11X returns on its initial investments.

This is a staggering return for the fund, however, not the only one for this year.

Apart from Byju’s, Sequoia has made several exits this year including Pine Labs, SCIO Health Analytics, Freecharge, Citrus Payments, etc.

What is special about this partial exit is that Sequoia seldom sells its stake so early, but it made an exception for the Bengaluru-based firm. And the decision has paid it well.

Byju’s latest funding has surprised everyone with its scale and the returns early investors like Sequoia have made out of this Series F round. It remains to be seen how the company utilises $540 million worth latest fundraise.