India’s edtech startup Byju’s acquires Aakash for nearly $1 billion

Byju's Aakash
Image by Milkos | Bigstockphoto

India’s edtech startup Byju’s is acquiring Aakash Educational Services Limited (AESL), a leader in exam preparation, for nearly $1 billion in a stock-and-cash deal to bolster further its positioning in the country’s fast-growing edtech space.

“Our complementary strengths will enable us to build capabilities, create engaging and personalised learning programs. The future of learning is hybrid, and this union will bring together the best of offline and online learning, as we combine our expertise to create impactful experiences for students,” Byju Raveendran, Founder and CEO, BYJU’S said in a statement.

Byju further added that the pandemic had brought the importance of the blended learning format to the forefront.

Blackstone Group and AESL’s founders will hold a minority stake in Byju’s after the transaction. Blackstone had acquired a 37.5% stake in AESL at a valuation of $500 million in 2019.

The edtech startup is now valued at $13 billion, as per Raveendran, who added that the company would invest new capital into AESL once the integration is completed to accelerate the latter’s growth.

“Together with BYJU’S, we will work towards building an omnichannel learning offering that will accelerate test-prep experience to the next level,” Aakash Chaudhry, Managing Director, AESL, said. The company has over 33 years of experience in the exam preparation space.

While this partnership will enhance its operational verticals, Aakash will continue to operate as a separate entity, Chaudhry said in a joint statement.

With over 215 centres, Aakash provides test preparatory services to students preparing for medical and engineering entrance exams, school/board exams, KVPY, NTSE, Olympiads, and other Foundation level exams.

Amit Dixit, Co-Head of Asia Acquisitions and Head of India Private Equity at Blackstone, said the private equity firm invested in AESL because it is one of India’s leading education brands.

“We have always believed omnichannel will be the winning model in test prep and tutoring, and we look forward to being a part of the partnership between the two foremost companies in Indian supplementary education – Aakash and BYJU’S. The combination of Aakash and Byju’s is highly synergistic, and we are excited to help build India’s largest education company,” Dixit added.

To grow its portfolio, Byju’s has been on an acquisition spree for the last few years. In 2019, it acquired US-based educational games maker Osmo for $120 million. In 2020, Byju’s acquired WhiteHat Jr, an online coding school for young kids, for $300 million.

As per reports, Byju’s is in advanced talks to acquire its smaller rival, Toppr, for $150 million.

Byju’s has also been raising funds to support its acquisitions and expansion. After raising over $1 billion in 2020, the company raised around $460 million in its long ongoing Series F round last month. MC Global Edtech Investments Holdings, which led the round, contributed around half of the amount at around $222 million.

Byju’s is now backed by investors like Chan-Zuckerberg Initiative, Naspers,

CPPIB, General Atlantic, Tencent, Sequoia Capital, Sofina, Verlinvest, IFC, Aarin Capital, TimesInternet, Lightspeed Ventures, Tiger Global, Owl Ventures & Qatar Investment Authority.

The edtech space in India is growing, with all major players raising funds to expand operations. Almost all of them have claimed to have seen dramatic growth in their engagement numbers since April 2020.

Byju’s app has over 80 million registered students and 5.5 million annual paid subscriptions.

Related article: India’s edtech startup Byju’s eyes $1 bn in revenue from home market

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