Byju's to buy medical, engineering entrance coaching leader Aakash for $1 billion
21 January 2021
India’s biggest online education start-up Byju’s has signed a deal to acquire brick and mortar test preparation leader Aakash Educational Services Ltd for $1 billion, in what is seen as one of the biggest deals in the edtech field.
As per the deal, Aakash’s founders, the Chaudhry family, will exit completely, while Blackstone will swap a portion of its 37.5 per cent equity in Aakash for Byju’s stake, reports citing sources said.
The deal is expected to close in the next two or three months, reports quoted sources as saying.
Bangalore-headquartered Byju’s is valued at $12 billion and has been on a fund-raising spree as the pandemic has sent demand for its online lessons soaring. India’s second-most valuable startup is backed by the likes of Facebook founder Mark Zuckerberg’s Chan Zuckerberg Initiative, Tiger Global Management and Bond Capital, co-founded by Silicon Valley investor Mary Meeker.
Blackstone Group-backed Aakash Institute has over 200 brick and mortar centers and tutors to guide and coach students, helping them to gain entry into the country’s elite engineering and medical colleges. Its student count is over 250,000, according to its website.
Offline brick and mortar tutoring centres have been worst as the pandemic forced closure of all educational institutions, not just in India, but throughout the world. The demand for online learning startups thrived in the absence of tutoring centers, for almost a year.
Byju’s was founded by Byju Raveendran, a former teacher and the son of educators, who conceived the smartphone app in 2011. The app caters to students from kindergarten to the 12th grade, providing lessons in maths and science through video animations and games.
Baiju’s has been adding over 5 million users a month. More than 70 million users logged in from over 1,700 cities around the country, Byju’s said last September ahead of its fund raising. Of these, over 4.5 million are paid users. It’s targeting doubling its revenues to $1 billion in the current financial year ending in March 2021, according to a Bloomberg report.
Byju’s has huge plans for expansion and the educational technology and online tutoring firm has announced plans to hire about 8,000 new people, for multiple roles, including content, sales and product development, this year.