Byju’s continues its fundraising and acquisition spree as it looks to further consolidate its leadership position in the education technology space.
Just days after the Indian EdTech decacorn has announced a $460 million fundraise in its ongoing Series F funding round, the company on Monday, April 5, 2021, confirmed its acquisition of physical coaching giant Aakash Educational Services Ltd for about $1 billion.
According to reports, the cash and stock deal (about $600 million in cash and the rest in stock) was closed last week, making it one of the biggest deals in India’s burgeoning EdTech space to date. As per the deal, Aakash Educational Services will function independently post the acquisition, with founders Aakash Chaudhry and J.C. Chaudhry continuing to lead the entity.
Aakash currently owns and operates about 200 physical coaching centers across the country, serving over 250,000 students who are preparing to qualify for top engineering and medical colleges in the country. The 33-year-old physical coaching giant has made some of its offerings available online in recent years, but executives from the firm told TechCrunch that the pandemic-triggered education transition has made Aakash and Byju’s explore a deal. According to them, the deal was closed over a timeline of six to seven months.
Talking about the development, Aakash Chaudhry, Managing Director and Co-promoter of Aakash Educational Services, told TechCrunch that the acquisition will enable the two entities to build the largest omni-channel for students in India. “Students who have wanted to access physical classrooms have gotten that from us. And those who wanted to access content and learning online have been served by Byju’s. Together, we will leverage the physical location and technology and online learning and offer students that is unique,” he said.
With the acquisition, Aakash’s pedagogy in the test prep segment will see an integration with Byju’s content and tech capabilities. The acquisition will also allow Aakash to open more coaching centers, targeting new students through a hybrid approach of online and offline.
Byju Raveendran, Founder and CEO of Byju’s, said that while the future of education will blend offline and online experiences, an online-only model for several of its offerings such as test prep is still a few years away. He said that the latest deal is also aimed at expanding the reach of Byju’s and Aakash in smaller towns and cities.
The latest acquisition marks Byju’s efforts to bolster its position in the test prep space as competition heats up. Its rival Unacademy has made close to six acquisitions last year in the test prep space alone. Internet giant Amazon India has also made its entry in the segment with the launch of Amazon Academy.
Byju’s has just raised about $460 million in its ongoing Series F funding round led by MC Global EdTech Investment Holdings LP, taking the company’s valuation to over $13 billion. The Bengaluru-headquartered EdTech major has raised more than $1 billion in 2020 alone. The company is currently serving more than 75 million students, with over 5 million annual paid subscribers.