Byju’s has inked a $1 billion deal to acquire Aakash Educational Services, a test-prep provider, Bloomberg has reported, as the world’s most valuable private ed tech branches out into brick-and-mortar, an educational segment challenged severely by the pandemic.
The deal represents one of the largest transactions ever undertaken by an ed tech company and is set to close in the coming months, according to the report.
Under the terms of the transaction, the founders of Aakash Educational Services, which runs Aakash Institute, operator of more than 200 centres that tutor students to gain entry to India’s elite engineering and medical schools, will exit completely. Blackstone Group, the company’s private equity sponsor, will swap a portion of its 37.5% equity in Aakash for a stake in Byju’s, Bloomberg reported.
Bangalore-headquartered Byju’s, valued at $12 billion, embarked on a fundraising spree last year as the coronavirus crisis ratcheted up demand for its online tuition services, leading it to win millions of new customers. The 10-year-old firm is bankrolled by the likes of Facebook founder Mark Zuckerberg’s Chan Zuckerberg Initiative, Tiger Global Management and Bond Capital.
Over the past 18 months, Byju’s has raised hundreds of millions of dollars from investors including BlackRock, Silver Lake and T. Rowe Price.
More than 70 million users logged in from over 1,700 cities around the country, Byju’s said last September when it announced a fund raise. Of these, over 4.5 million are paid users. It’s targeting doubling its revenues to $1 billion in the current financial year ending in March 2021.
Date published: 14 January 2021