Edtech major Byju’s, which is merely 10 years old, has acquired 33-year-old test prep coaching chain Aakash Educational Services Ltd (AESL) for nearly $940 million in a cash and stock deal. The deal was in the works for some time and was formally announced early last month. Byju’s is currently valued at $13 billion.
This is the biggest deal in the edtech sector so far and brings together two of the largest and most-trusted education brands in India – combining Aakash’s pedagogy expertise in the test-prep segment with Byju’s content and tech capabilities. After the integration, Byju’s will make further investments to accelerate Aakash’s growth.
|The acquisition points to Byju’s endeavours to strengthen its presence in the growing test preparation space where Aakash is the undisputed king|
Interestingly, this is said to be Byju’s second acquisition in less than 12 months. In August last year, it had acquired WhiteHat Jr, a startup focused on imparting coding skills to kids, in a $300-million cash deal.
With over 33 years of experience, Aakash has built a highly effective learning ecosystem that has helped millions of young aspirants get into the country’s best institutions. In 2019, AESL partnered with Blackstone to create India’s largest digitally enabled, omni-channel test preparation company. Under the phenomenal leadership of Founder JC Chaudhry and Aakash Chaudhry, it will continue to function independently.
Byju Raveendran, Founder, and CEO, Byju’s, said, “I am happy to have Aakash Educational Services Limited (AESL), a market leader and the most trusted name in the test prep services, on board with us. Our complementary strengths will enable us to build capabilities, create engaging and personalised 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.”
“The pandemic has brought the importance of the blended format of learning to the forefront. As we unite our forces to bring together decades of expertise and experience, this partnership will further accelerate Aakash’s growth and success,” Byju further added.
Aakash Chaudhry, Managing Director, AESL, said, “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 omni-channel learning offering that will accelerate test-prep experience to the next level. While this partnership will enhance our operational verticals, Aakash will continue to operate as a separate entity with the same passion and commitment with which its Founder and Chairman J C Chaudhry incepted it. We are excited to partner with Byju’s, and will strive to deliver long-term value to our students, employees, investors and other stakeholders.”
The addition of Aakash is a significant step towards strengthening Byju’s product offering. It reiterates the company’s focus on creating impactful learning products for students by adding more verticals, subjects, and languages to the same platform.
Amit Dixit, Co-Head of Asia Acquisitions and Head of India Private Equity at Blackstone, said, “We invested in AESL because it is one of the leading education brands in India with a professional management team, best-in-class corporate governance and a 33-year track-record of exceptional results. We have always believed omni-channel will be the winning model in test prep and tutoring, and we look forward to being a part of the partnership between the two foremost companies in Indian supplementary education – Aakash and Byju’s. The combination of Aakash and Byju’s is highly synergistic and we are excited to help build India’s largest education company”
With over 215+ centres, Aakash provides test preparatory services to students preparing for medical and engineering entrance exams, school/board exams, KVPY, NTSE, Olympiads and other foundation level exams. Known for its integrated teaching methodology and focused learning environment, Aakash has built a tradition of excellence and has helped millions of students embark on successful learning journeys.
Founded in 2011, Byju’s is the leader in offering personalised learning programs for school students in India. With over 80 million students cumulatively learning from the app, 5.5 million annual paid subscriptions, and an annual renewal rate of 86%, the app creates personalized learning programs for individual students based on their proficiency levels and capabilities which help them learn at their own pace and style. In just 6 months during the lockdown, Byju’s has added 45 million new students on its platform. Meanwhile, the Bengaluru-based startup is reportedly in discussions to acquire rival Toppr in a transaction estimated to be over $100 million.
Over the years, Aakash has built and maintained the highest standards of teaching, result-oriented test preparation for some of the toughest entrance exams like JEE, NEET, NTSE etc. with its expert faculty. Unified by a shared vision to create value for the student community and boost the learning ecosystem, this integration will help accelerate and scale Aakash’s growth in the test prep industry, the companies said.
According to a recent report by EY-IVCA, the market size of Indian edtech sector is estimated to grow by 3.7 times in the next five years, to touch $10.4 billion by 2025 from $2.8 billion in 2020. The segment will see more than 37 million paid users by 2025.