Byju’s to buy Blackstone-backed tutoring business for $1bn
India’s biggest online- education start-up Byju’s signed a deal to acquire bricks-andmortar tutoring business Aakash Educational Services for $1 billion.
The deal will be one of the largest education technology acquisitions in the world and is expected to close in the next two or three months.
Bengaluru-based Byju’s is valued at $12bn and has been on a fundraising spree after the Covid-19 pandemic fuelled demand for its online lessons.
India’s second-most valuable start-up 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.
Online education has become one of the hottest investment arenas amid the pandemic, attracting investors betting that a prolonged pandemic will make the online learning format more commonplace.
That is particularly true in India, where a scarcity of good teachers and quality learning material is encouraging students to try out widely accessible online classes.
Byju’s has raised hundreds of millions of dollars over the past year from investors such as BlackRock, Silver Lake and T. Rowe Price, while Unacademy raised money in a September funding round led by SoftBank that resulted in a valuation of $1.45bn.
While online learning startups have thrived, physical schools and tutoring centres have been badly hit by the pandemic since March last year.
Blackstone- backed Aakash Educational Services runs Aakash Institute, which has over 200 brick-and-mortar centres and enrols students vying to gain entry into the country’s elite engineering and medical schools.
Its student count stands at more than 250,000, according to its website.
Under the terms of the deal with Byju’s, Aakash’s founders, the Chaudhry family, will exit completely while Blackstone will swap a portion of its 37.5 per cent equity in Aakash for a stake in Byju’s.
A Byju’s spokeswoman declined to comment while emails and calls to New Delhi-based Aakash and its chief executive Aakash Chaudhry were not answered.
Byju’s was founded by Byju
Raveendran, a former teacher, in 2011. The smartphone app caters to schoolchildren from kindergarten to the 12th grade and has added more than 5 million users a month.
India has about 250 million schoolchildren. The app provides lessons in mathematics and science subjects through video animations and games.
More than 70 million users logged in from more than 1,700 cities around the country, Byju’s said in September.
Of these, more than 4.5 million were paid users. The company intends to double its revenue to $1bn in the financial year ending in March 2021.
Byju’s has raised hundreds of millions of dollars over the past year from investors such as BlackRock and Silver Lake