Byju's is Acquiring Aakash Education Services for $800 mn in One of the Largest Deals in EdTech

Edtech startup Byju’s is acquiring Blackstone Group-backed Aakash Educational Services in an estimated USD 800- million cash-and-stock deal.

According to a report by Economic Times, after the transaction, Blackstone Group and Aakash Institute’s founders will hold a minority stake in Byju’s at a valuation of about USD 13 billion

“We will integrate Aakash’s expertise in test prep with our content and tech capabilities and will invest further capital into Aakash once the integration is done,” he told Economic Times.

Aakash Educational Services is the second large acquisition in less than a year for the edtech space. A major chunk of that capital will be used to finance the Aakash buyout.

In 2019, Blackstone picked up 37.5 per cent stake in Aakash Educational Services, valuing it at around $500 million. The pandemic, however, hurt the company’s growth plans as revenue dropped from Rs 1,200 crore as on March 31, 2020, to Rs 1,000 crore in 2020-21.

Having grown both organically and inorganically through acquisitions, Byju’s has seen a steady rise in its revenues and valuations.

In 2019, Byju’s acquired US-based Osmo, a maker of educational games, for $120 million. “Today, Osmo is delivering a 4.5x growth and is clocking around $115 million in revenues and is expected to close FY22 at $200 million,” Raveendran said.

In an interview to Moneycontrol last month, Divya Gokulnath, the co-founder of Byju’s, said that there are plans in place to take the ed-tech behemoth global this year itself.

“In 2021, we do aspire to go global. And I think there is a lot of potential for a company made in India to take this kind of a product to the world because there is a need for a learning product that completely takes care of a child’s learning from end to end. The right kind of programmes, platforms and products for learning can help create products that can take India to a global level,” she had said.

With over 33 years of experience, Aakash has reportedly said it has built a highly effective learning ecosystem that has helped millions of young aspirants get into the country’s best institutions. In 2019, AESL partnered with private equity firm Blackstone to create India’s largest digitally enabled, omnichannel test preparation company. Under the leadership of Founder JC Chaudhry and Aakash Chaudhry, it will continue to function independently.

EY was the exclusive financial advisor for Byju’s on this transaction. Phoenix Advisors was the exclusive advisor for the AESL.

With over 215 centres, Aakash provides test preparatory services to students preparing for medical and engineering entrance exams, school/board exams, KVPY, NTSE, Olympiads, and other Foundation level exams.

Launched in 2015, Byju’s is the leader in offering personalised learning programs for school students in India. In just 6 months during the lockdown, Byju’s has added 45 million new students to its platform.

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