Since the outbreak of the COVID-19 pandemic, the edtech sector has got a shot in the arm. Taking digital learning a notch higher, India’s biggest online education firm Byju’s is set to acquire Aakash Educational Services, which owns and operates a chain of 200 offline coaching centres across the country.
According to a Bloomberg report , the deal has locked at $1 billion and is expected to be closed over the next two or three months. It will see the complete exit of Aakash founders — the Chaudhry family — while Blackstone Group, which backs the coaching brand, will swap a portion of its 37.5 percent equity in Aakash for a stake in Byju’s.
An official confirmation from either party is, however, yet to come.
Bengaluru-headquarted Byju’s has been raising funds during the pandemic that has pushed up the demand for online lessons. At the same time, it has dealt a blow to brick-and-mortar coaching institutes like Aakash, which have been forced to stay shut since March 2020.
New Delhi-based Aakash Educational Services is considered the biggest institute when it comes to admissions for top engineering and medical institutes. According to its website, it has more than 2.5 lakh students enrolled for coaching.
The deal is part of a series of achievements for Byju’s. In January 2020, it achieved the coveted ‘decacorn status’ following a $100 million investment by Bond Capital, which is co-founded by Silicon Valley investor Mary Meeker.
In August last year, it acquired edtech startup WhiteHat Jr, which focuses on online coding classes for children. Four months later, in December, there were reports about the app receiving $200 million from large equity investors like T Rowe Price and BlackRock.
Byju’s, whose current value is pegged at $12 billion, was founded by a teacher named Byju Raveendran in 2011. The smartphone app has educational material in the form of animation videos and games, catering to students right from kindergarten to Class 12.
In September 2020, Byju’s revealed that more than 70 million users had logged in to the app from over 1,700 cities across India to catch up on studies.
Of those, 4.5 million are said to be on subscription. The platform has been reportedly adding 5 million users every month.
Byju’s is endorsed by the Chan Zuckerberg Initiative (a charity set up and owned by Facebook Inc. founder Mark Zuckerberg), Tiger Global Management as well as Bond Capital.
