As reported earlier by Pixr8 News, Edtech platform Byju’s acquires India’s leading engineering preparation coaching Akash Institute in a $1 billion cash and stock deal.
AESL Managing Director Aakash Chaudhry said, “the transaction with Byju’s is 60-65 percent cash and the remaining 35 percent are Byju’s equity deal. The overall deal value is close to about USD 1 billion. 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”.
Blackstone Group and Aakash Educational Services Ltd (AESL) founders will hold a minority stake in Byju’s, which is valued at about USD 13 billion.
This will be the largest acquisition deal in the education space in India. 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.
In its over 33 years of existence, AESL has helped millions of students prepare for medical and engineering entrance exams. It has a pan-India network of 215 centres (including franchisees), and a student count of more than 250k.
In 2019, private equity firm Blackstone had picked up a 37.5 percent stake in AESL. While the company had not disclosed the financial details, sources said the $185 million transactions had valued AESL at USD 500 million (over Rs 3,545 crore).
Byju’s cited industry reports and said the test preparation and after-school tutoring (secondary level) segment is estimated to be a $7-8 billion opportunity in India and is expected to witness 55-60 percent growth over the next 4-5 years.
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. It is estimated to have raised over USD 2 billion in funding to date and looking to raise $600-$700 million in next round of funding.
Byju’s had acquired TutorVista and Edurite (from Pearson in 2017) and Osmo in 2019. Last year, the General Atlantic-backed company had bought coding training platform WhiteHat Jr for USD 300 million.