India’s biggest online-education app, called Byju’s, signed a deal to acquire brick and mortar test prep leader Aakash Educational Services Ltd for 1 billion dollars, according to a person with knowledge of the talks, Bloomberg Quint reported.
Byju’s, headquartered out of Bengaluru, is valued at 12 billion dollars and has been on a fundraising spree. During the COVID-19 pandemic, with learning moving to homes, the demand for its sessions online have been increasing.
This deal will be one of the largest edtech acquisitions worldwide and is set to close within three to four months, said the person who did not want to be identified, to BloombergQuint.
Amongst those who are backing the start-up are Facebook Inc. founder Mark Zuckerberg’s Chan Zuckerberg Initiative, Tiger Global Management and Bond Capital, co-founded by Silicon Valley investor Mary Meeker. At a time when online education is growing at a fast pace in the country, Byju’s has raised hundreds of millions of dollars over the past year from investors including BlackRock, Silver Lake and T. Rowe Price.
The report also adds how this deal will mean that Aakash founders will entirely exit. Blackstone group-backed Aakash Educational Services runs Aakash Institute. So while the founders exit, Blackstone will swap a portion of its 37.5 percent equity in Aakash for Byju’s stake, the source told BloombergQuint.
Aakash has over 200 brick and mortar centers and tutors students which train kids to enter engineering and medical schools.
Byju’s was founded by a former teacher and son of educators, Byju Raveendran. The app is adding 5 million users a month. More than 70 million users logged into the application from over 1,700 cities in India. Of these, 4.5 million users are paid users.