Byju's Acquires Test Prep Company Aakash Educational Services for Nearly $1 Billion
Edtech unicorn Byju's has acquired test-prep leader Aakash Educational Services in a deal worth $1 billion (about Rs 7,300 crore). This marks Byju’s biggest acquisition till date and is aimed at positioning the edtech firm in the brick and mortar segment.
Post the transaction, Blackstone Group and Aakash Educational Services Ltd (AESL) founders will hold a minority stake in Byju's, which is valued at about $13 billion.
Byju's, the most valued edtech startup in the country, is backed by marquee investors like Mary Meeker, Yuri Milner, Chan-Zuckerberg Initiative, Tencent, Sequoia Capital, Tiger Global and others. It is estimated to have raised over $2 billion in funding to date.
Byju's had earlier acquired Tutor Vista and Edurite and Osmo in 2019. Last year, the General Atlantic-backed company had bought coding training platform WhiteHat Jr for $300 million.
AESL Managing Director Aakash Chaudhry said the transaction with Byju's is part cash and part equity deal. "It is close to 60-65 per cent cash and the remaining equity...The overall deal value is close to about $1 billion," he said during media interactions. AESL and Byju's started exploring a deal about 6-7 months ago. "This will be the largest integration in the education space in India, especially in the startup space...COVID has really opened the gates to online education significantly and going forward, we believe that all kinds of models in education will exist in K-12, test prep and even in higher education," Chaudhry said.
Together with Byju's, AESL will be able to provide students with the education it was providing but at a much larger scale with multiple delivery channels that can be innovated out of both ecosystems (online and offline), he added. After the integration, Byju's will make further investments to accelerate Aakash's growth, he noted. Chaudhry said Aakash Educational Services Ltd will continue to operate as a separate entity and further expand its presence in the country.
Private equity firm Blackstone had picked up a 37.5 per cent stake in AESL in 2019. While the company had not disclosed the financial details, sources said the Rs 1,350 crore transaction had valued AESL at $500 million (over Rs 3,545 crore).