Byju’s On A Shopping Spree: Purchases Aakash for $1 Billion

It started as a collaboration talk between Byju’s and Aakash Educational Services ended up being a take-over deal, one of India’s most expensive deals in the education space – a whopping $ I billion. This billion-dollar deal comes with a cash and stock payout in a 70:30 ratio, to the promoters of Aakash – J Chaudhary and Blackstone capital. Byju’s pricey acquisition of Aakash surpasses that of  Whitehat Jr., which took place in August 2020 for $ 300 million. What prompted this decade old startup to buy out a 30 year old company? Byju’s is India’s pioneer EdTech platform, now focusing on the traditional face-to-face learning approach. The EdTech giant is eyeing an expansion in offline education, its competitor. 

Aakash Education is a prominent preparatory institute focussed solely on numerous entrance and special exams. In 1988 it started only for medical exam training, today they have 215 centres pan India with about 1,51, 000 students. Byju’s was founded in 2011 by R Byju, with emphasis on online education. Byju’s saw a massive uptick in its usage by around 80% since the start of the pandemic owing to the shutdown of preparatory institutions.  This attracted massive investments from global capital firms such as yMc Global, Entrakr and BlackRock, Tiger Global, General Atlantic, and Owl Ventures, raising $ 1.26 billion just in FY21. Overall, this has pushed its off-market valuation to approximately $ 14 billion (Rs 93600 crores).

This unexpected move by BYJU’S comes when India is experiencing an EdTech boom with a backdrop of pandemic induced restrictions. This deal widens Byju’s student base, according to Aakash founder new entity would conduct its operations in a hybrid model. Aakash, like many other businesses, slumped due to the pandemic assuaged by a poor transition to an online platform. With the reopening of schools, colleges, and educational centres hanging in thin air, EdTech has vast potential to grow. 

A paradigm shift has been noticed in the exam preparation segment. EdTech is the future, Unacademy last year alone made 12 acquisitions. Amazon too is starting an Amazon Academy. Put together BYJU’S – Aakash can develop many synergies and complement each other’s growth in the long run. Whether this deal would be a success or not can be known after some time, but this would undoubtedly be a make-or-break deal for BYJU’S.