India’s biggest online-education startup Byju’s has signed a deal to acquire brick & mortar test prep leader Aakash Educational Services Ltd. for $1 billion, according to a person with knowledge of the talks.
The world’s most valued edtech company will be looking to close the deal “in the next two or three months”, according to a Bloomberg report, which quoted unnamed sources. Aakash is backed by PE firm Blackstone Group and runs the renowned Aakash Institute, which has over 200 physical coaching centers for engineering and medical test prep. It claims to have over 250K learners, according to its website.
The report claimed that Aakash Educational Services CEO Aakash Chaudhry and the Chaudhry family will completely exit the company, while Blackstone will swap some of its 37.5% equity in Aakash for a stake in BYJU’S. In what would be the largest edtech acquisition in the world, Indian edtech giant BYJU’S is reportedly close to acquiring test prep giant Aakash Educational Services Ltd for $1 Bn .
Earlier this year, Aakash was said to be in talks to acquire a majority stake in Delhi NCR-based edtech startup Meritnation. The company was in talks to buy 66% stake from Info Edge (India) Ltd for INR 50 Cr. While it had an extensive offline coaching network, Aakash had entered online learning with the launch of test prep portal iConnect in 2014. The platform has since been overhauled and currently run under the name iTutor.
As per sources who spoke to Inc42 in November 2020, Bengaluru-based BYJU’S is in the final stages of closing a $200 Mn equity funding round from BlackRock along with participation from T. Rowe Price, the Baltimore-based investment management firm. The fresh funding will value BYJU’s at around $12Bn, a 11% markup from its earlier valuation of $10.8 Bn when it last raised an undisclosed round of funding from BlackRock, Sands Capital and Alkeon Capital in September.
Since the lockdown in March 2020, BYJU’S has claimed to have added over 25 Mn new students on its platform. In August 2020, BYJU’S acquired the Mumbai-based online coding platform WhiteHatJr for $300 Mn. Last year, the company raised $122 Mn (nearly INR 909 Cr) from billionaire Yuri Milner-led DST Global as a part of its Series F funding round in August. While in July, the company had also raised $23 Mn in Series F from Mary Meeker’s BOND Capital.
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. A Byju’s spokeswoman declined to comment, while emails and calls to New Delhi-based Aakash Educational Services and its Chief Executive Officer Aakash Chaudhry did not elicit a response.