Byju’s, India’s EdTech unicorn is all set to acquire Aakash Educational Services Ltd for a whopping one billion dollars. The deal will be one of the biggest EdTech acquisitions in the world. It is being seen as a significant move in the test prep space and online learning even though the deal will be finalized within the next 2-3 months.
This acquisition has come barely after six months of Byju‘s acquiring WhiteHat Jr., an online coding platform for $300 million which was also marked as one of the biggest deals in the EdTech space. Byju’s had also acquired a US-based startup, Osmo last year for $120 million and according to the CEO of the company, Byju Raveendran this acquisition was an opportunity to add a hands-on online experience for its students.
Aakash Educational Services Ltd., a Delhi-based startup is the test preparation leader in the country which works on a brick and mortar model. There are over 200 centers across the country that prepares children for competitive exams to gain entry into elite medical and engineering colleges in the country. It also prepares students for NTSE, KVPY, Olympiads, and other foundation level exams through its chain of coaching centers. Aakash Educational Services is backed by Blackstone Group that holds a stake of 37.5%.
This deal will see a complete exit of the founders of Aakash Educational Services Ltd. and Blackstone, its investor will swap a portion of its stake of 37.5% in Aakash for its stake in Byju’s. However, the exact figure of the stake is still unknown. Some reports also suggest that the Aakash family will get $300 million as a cash payout.
Due to the pandemic, physical and offline coaching centers and institutes have taken a hit while there has been a surge in online classes. Byju’s, a Bangalore-based startup that began its journey in 2011 has now completely shifted to an online model. The app caters to students from KG to grade 12 and offers lessons in math and science through video animation and games.
The company has raised funds from prominent investors in last couple of years. It is presently valued at $12 billion and has been looking at expanding further. Byju’s is backed by Mark Zuckerberg’s Chan Zuckerberg Initiative, Mary Meeker’s Bond Capital, a prominent Silicon Valley investor, and Tiger Global Management. The demand for this platform peaked during the pandemic.
Byju’s boasts of over 70 million users from more than 1700 cities across the nation. Out of these 5 million are paid users. The company targets to double its revenue in the current FY ending March 2021.