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Monday, April 12, 2021

Byju’s buys Aakash for nearly $1 billion

This acquisition has become the biggest one by Byju’s, overtaking its previous purchase of online coding training platform WhiteHat Jr for $300 million last year.

By: ENS Economic Bureau | New Delhi |
Updated: April 6, 2021 4:21:04 am
Byju's, the most valued ed-tech startup in the country, is backed by marquee investors like Mary Meeker, Yuri Milner, Chan-Zuckerberg Initiative, Tencent, Sequoia Capital, Tiger Global and others. (Representational)

In what has come as a significant bet on the hybrid model of education, the country’s most valuable ed-tech startup Byju’s on Monday announced acquisition of Aakash Educational Services Ltd (AESL) for close to $1 billion. This acquisition has become the biggest one by Byju’s, overtaking its previous purchase of online coding training platform WhiteHat Jr for $300 million last year.

In a statement, founder and CEO of Byju’s Byju Raveendran said: “Our complementary strengths will enable us to build capabilities, create engaging and personalised learning programmes. The future of learning is hybrid and this union will bring together the best of offline and online learning, as we combine our expertise to create impactful experiences for students”.

According to sources, Byju’s, which is backed by investors such as Tiger Global, Sequoia Capital, Tencent, and Chan-Zuckerberg Initiative is in talks to raise an additional $600-700 million.

AESL had already ventured into an omni-channel model, when it raised money from Blackstone back in 2019 by offloading 37.5 per cent stake valuing the company at nearly $500 million. The test-preparation company runs more than 200 tutoring centres in the country. “Together with Byju’s, we will work towards building an omni-channel learning offering that will accelerate test-prep experience … While this partnership will enhance our operational verticals, Aakash will continue to operate as a separate entity,” said Aakash Chaudhry, managing director, AESL.

India’s test-prep segment is already a crowded one, with several players attempting to find a leadership position in various segments. Earlier this year, Amazon entered the space with the launch of Amazon Academy, a service for students to prepare for competitive entrance examinations.

As a result of the growth witnessed because of the pandemic, the education segment saw a record inflow of over $2 billion in 2020 from private equity and venture capital firms, with majority being cornered by startups like Byju’s, Unacademy, Vedantu, and Toppr. Those tracking the sector pointed out that interest in ed-tech companies has been mainly due to the pandemic, which forced schools and colleges to shut and prompted people to upgrade their skills for a shrinking job market.

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