Baiju acquires Akash Educational Services

Ad-tech startup Bayju said on Monday that it had acquired Aakash Educational Services Limited (AESL) to make its presence felt in the test preparation segment in the country.

According to sources, the deal is worth around US $ 1 billion (approx. 300 7,300 crores) – the largest acquisition till date of interest.

However, the companies did not comment on the financial details of the deal. As part of the transaction, Akash will become the founder and a shareholder in Blackstone Biju.

Byju, which is the country’s most valuable ad-tech startup, is supported by marquee investors such as Mary Meeker, Yuri Milner, Chan-Zuckerberg Initiative, Tencent, Sequoia Capital, Tiger Global and others. It is estimated that more than US $ 2 billion has been raised in funding so far.

According to sources, Biju is in talks to raise an additional USD 600–700 million in funding which will help further growth acceleration.

In the past, Biju acquired Tutorvista and Adurite (from Pearson in 2017) and Osmo in 2019. Last year, the General Atlantic-backed company bought the coding training platform Whitehat Jr. for US $ 300 million.

“This will be the largest integration in the field of education in India, especially in the startup space. COVID has indeed opened doors to online education significantly and moving forward, we believe that all types of models in education will exist in K-. 12, test submission and even in higher education, ”AESL managing director Aakash Chaudhary told PTI.

He said that with Biju, AESL would be able to provide students with the education it was providing, but on a much larger scale with multiple distribution channels that could be rolled out of both ecosystems (online and offline), They said.

He said that after the integration, Baiju will invest further to accelerate the growth of Akash.

Mr. Chaudhary said that AESL will continue to operate as a separate entity and further expand its presence in the country.

“At Akash, we want to transform student experiences by adding innovative and digitally enabled learning solutions. Together with BYJU’S, we will work towards building an omnichannel learning offering that will accelerate the pre-trial experience to the next level.

In its 33 years of existence, AESL has helped millions of students prepare for medical and engineering entrance examinations. It has an all-India network of 215 centers (including franchises), and a student base of over 2.5 lakhs.

In 2019, private equity firm Blackstone took a 37.5% stake in AESL. While the company did not disclose the financial statements, sources said that the transaction amounted to AESL 500 million (more than ₹ 3,545 crore) of the 1,350 crore transaction.

“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 an impactful experience for students, ”said Byju Ravendran, founder and CEO of Byju.

He said that the addition of Akash is an important step towards strengthening its product offering.

Byju cited industry reports and said that India is expected to have a USD 7-8 billion opportunity after the exam preparation and school tuition (high school) segment, and 55-60% in the next 4-5 years. The increase can be seen.

Regarding whether the ad-tech platform for the acquisition would continue, Biju said the company would bring in new products and formats, market expansion and / or distribution opportunities.

Launched in 2015, Byju has over 80 million students, learning cumulatively from the application, 5.5 million annual paid subscriptions and an annual renewal rate of 86%. During April – September 2020, Byju added 45 million new students to its platform.

EY was the exclusive financial advisor to Baiju on this transaction. Phoenix Advisors was the Special Advisor for AESL.