Byju's Set For Buying Medical, Engineering Entrance Coaching Leader Aakash

CIOReviewIndia Team | Wednesday, 13 January 2021, 06:30 IST

One of India’s biggest online-education startups, Byju’s has signed a deal for acquisition of brick and mortar test prep leader Aakash Educational Services Ltd. for $1 billion, according to a person with the knowledge of the talks.

This deal is one of the largest in the edtech acquisitions in the world, which should close in the next two or three months said by the person, who wanted to stay unidentified.

Byju’s, headquartered in Bengaluru, is valued at $12 billion and has been on a fund-raising spree as the pandemic has sent demand for its online lessons soaring.

Byju’s is India’s second-most valuable startup which is backed by the ventures like Facebook founder Mark Zuckerberg’s Chan Zuckerberg Initiative, Tiger Global Management and Bond Capital, co-founded by Silicon Valley investor Mary Meeker.

A Byju’s spokeswomen declined to comment as the emails and calls to New Delhi-based Aakash Educational Services and its Chief Executive Officer Aakash Chaudhry did not elicit a response.

Blackstone Group-backed Aakash Educational Services runs Aakash Institute which has more than 200 brick and mortar centers and tutors students for gaining entry into the country’s elite engineering and medical schools. According to the website, it has a student count of more than 250,000.

While online learning startups are flourishing, offline tutoring centers have been hit badly by the pandemic, due to which schools closed and tutoring centers shut down since March last year.

According to this deal with Byju’s, Aakash’s founders, the Chaudhry family will exit completely, while Blackstone will swap a portion of its 37.5 percent equity in Aakash for Byju’s stake, as the person informed.

Founded by Byju Raveendran, who is a former teacher and the son of educators, Byju’s smartphone app started in 2011. The application contributes to the students from kindergarten to the 12th grade, and has been rolling over 5 million users every month. India has about 250 million students in the K-12 grades and the app provides lessons in maths and science through video animations and games.

More than 70 million users from around 1,700 cities in the country logged in the last September. From this number, 4.5+ million are paid users and it’s targeting to double its revenue to $1 billion in the present fiscal year ending March 2021.

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