Educational technology company Byju’s announced on April 1st that it acquired Aakash Educational Services Ltd (AESL) for $1 billion. The billion dollar deal is Byju’s largest acquisition to date and is expected to strengthen its position in India’s test preparation segment.
Following the acquisition, AESL will function independently under the leadership of its founders Aakash Chaudhry and J.C. Chaudhry. Byju’s described the deal with AESL as a strategic partnership. The deal’s financial details are yet to be disclosed. Through the deal, the founders of Aakash and Blackstone will be new shareholders in the company. Ernst & Young is the current financial advisor for Byju’s, whereas Phoenix Advisors took the lead on the transaction for AESL.
Byju’s, India’s most valued ed-tech startup, is backed by investors such as Yuri Milner, Chan-Zuckerberg Initiative, Tencent, Sequoia Capital, Tiger Global, and others. The company has raised an estimated $2billion in funding to date. As per sources, Byju’s is reportedly looking to raise an additional $600-700 million to accelerate its growth.
AESL Managing Director Aakash Chaudhry said, “This will be the largest integration in India’s education space, especially in the startup space. COVID-19 has opened the gates to online education significantly, and in the future, we believe that all kinds of models in education will exist in K-12, test prep, and even in higher education.” He added that the integration of Byju’s’ services with that of Aakash would enable AESL to provide students education on a much larger scale with multiple delivery channels that could be innovated both online and offline.
He also stated that post the integration, Byju’s would invest further to expedite Aakash’s growth. “At Aakash, we are looking to transform student experiences by steering innovative and digitally-enabled learning solutions. Together with BYJU’S, we will work towards building an omnichannel learning offering that will accelerate test-prep experience to the next level.”
Over the last three decades, AESL has developed a network of 215 centres (including franchises) and a student base of over 2.5 lakhs across India.
Private equity firm Blackstone procured a 37.5% stake in AESL in 2019. The Rs. 1,350 crore deal reportedly valued AESL at $500 million.
Byju Raveendran, founder and CEO of Byju’s, was quoted saying, “Our complementary strengths will enable us to build capabilities, create engaging and personalized learning programs. The future of learning is hybrid, and this union will bring together the best of offline and online learning, as we combine our expertise to create impactful experiences for students.” He further said that the acquisition of Aakash was a significant step towards strengthening its product offering. According to industry reports, Indias’ test preparation and after-school tutoring segments are expected to witness a 50%-60% growth over the next few years.