India’s biggest online-education startup Byju’s has signed a deal to acquire brick & mortar test prep leader Aakash Educational Services Ltd.for $1 billion, reported Bloomberg on January 12.
Backed by Blackstone Group, Aakash Educational Services runs Aakash Institute, the well-known chain of coaching centres that train students for engineering and medical entrance exams.
According to the report, the deal, one of the largest edtech acquisitions in the world, will be closed in the next two to three months. Aakash’s founders, the Chaudhry family will exit completely, while Blackstone will swap a portion of its 37.5 percent equity in Aakash for Byju’s stake.
However, there has been no official confirmation of the same from either Byju’s or Aakash Educational Services.
Bangalore-headquartered Byju’s is valued at $12 billion and has been on a fund-raising spree as the pandemic has sent demand for its online lessons soaring. India’s second-most valuable startup is backed by the likes of Facebook founder Mark Zuckerberg’s Chan Zuckerberg Initiative, Tiger Global Management and Bond Capital, co-founded by Silicon Valley investor Mary Meeker.
The app caters to students from kindergarten to the 12th grade, and has been adding over 5 million users a month. India has about 250 million students in the K-12 grades. The app provides lessons in maths and science through video animations and games.
A big reason for such exponential growth of Byju’s is the lockdown due to the COVID-19 pandemic that forced users to switch from traditional educational methods to online learning.
Blackstone Group-backed Aakash Educational Services runs Aakash Institute, which has over 200 brick and mortar centers and tutors students to gain entry into the country’s elite engineering and medical schools. Its student count is over 250,000.