Byju’s has signed a deal to acquire the brick & mortar test prep company Aakash Educational Services Ltd. for $1 billion, a Bloomberg report said.
Acquiring Aakash will lend Byju’s a broader set of offerings and the well-established legacy of the brick and mortar test prep leader. According to the report, the deal is bound to close in the next two or three months.
The acquisition will entail the complete exit of Aakash’s founders, the Chaudhry family. Private equity firm Blackstone, which picked up a 37.5% stake in Aakash Educational Services in October 2019, will swap a portion of its stake in Aakash for Byju’s stake.
Byju’s has witnessed phenomenal growth since the Covid-19 pandemic forced schools and tutoring institutions to shut down, causing widespread dependence on e-learning platforms. Byju’s has raised more than $1 billion in 2020. While e-learning edtech startups have thrived since the pandemic, brick & mortar tutoring institutes have received the short end of the stick.
Founded in 1988, Aakash Educational Services, the parent company of all Aakash Institutes, owns more than 200 physical tutoring institutes across the country for students preparing for engineering and medical colleges. It forayed into the digital learning space in June 2020 by acquiring online coaching firm Meritnation for Rs 50 crore.
This is the first acquisition by Byju’s in 2021. In August 2020, Byju’s acquired WhiteHat Jr for $300 million.