Indian Economy News

Byju's to buy medical, engineering entrance coaching leader Aakash in US$ 1 billion mega deal

  • IBEF
  • January 13, 2021

Byju's, India's largest online education startup, has signed an agreement for US$ 1 billion to acquire brick & mortar test prep pioneer Aakash Educational Services Ltd, stated a spokesperson.

The deal is expected to be completed in the next two or three months.

Byju's, headquartered in Bangalore, is estimated at US$ 12 billion and has been on a fund-raising drive as the pandemic outbreak drove  interest for online lessons. India's second most valuable startup is funded by the likes of the Chan Zuckerberg Initiative, Tiger Global Management and Bond Capital, co-founded by Silicon Valley investor Mary Meeker.

Aakash Educational Services, which is backed by the Blackstone Group, runs the Aakash Institute, which has over 200 brick and mortar centres and tutors’ students to enter the prestigious engineering and medical schools of the world. Its number of students is over 250,000.

According to the spokesperson, Aakash's founders, the Chaudhry family, will exit entirely as per the deal with Byju's, while Blackstone will exchange a portion of its 37.5% equity in Aakash for Byju’s stake

Byju's was established by Mr. Byju Raveendran, a former teacher and educator's son, who designed the smartphone app in 2011. The app caters to kindergarten to 12th grade students and has been adding more than 5 million users a month. In the K-12 classes, India has about 250 million students. The app offers lessons by video animations and games in math and science.

Byju's said last September that more than 70 million users signed in from over 1,700 cities across the country when it announced a fund raise. Over 4.5 million of these are consumers who are paying. In the current financial year ending March 2021, the goal is to double its revenue to US$ 1 billion.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.

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