Exclusive: Byju’s in talks to acquire Great Learning and Gradeup for $400 Mn

Flush with capital, edtech major Byju’s is actively scouting for acquisitions. After raising $1 billion just weeks ago and completing the acquisition of Aakash Educational Services, it is now in late-stage talks to acquire two new companies, said three sources aware of the details of the transactions.

“Byju’s is in advanced-stage talks to acquire the upskilling platform Great Learning and test prep firm Gradeup,” said one of the people requesting anonymity. 

According to sources, conversations with both companies have reached the post term sheet stage. “Byju’s is likely to spend over $330-350 million to acquire Great Learning,” said the second person who also wished not to be named.

Great Learning is an eight-year-old bootstrapped startup based out of Gurugram. It offers programs in the field of Data Science, Analytics, AI, Machine Learning, Cloud Computing, Cybersecurity and Digital Business. 

The Mohan Lakhamraju-led company had an operating revenue of Rs 227.60 Crore in FY20 with an expense of Rs 239.82 crore, regulatory filings show. Its losses stood at Rs 8.77 crore during FY20.

“For Gradeup, Byju’s will shell out anywhere between $40-50 million,” said the person quoted in the beginning of the story. “This acquisition would strengthen Byju’s game in the test preparation segment against Unacademy.”

Gradeup helps students prepare for various exams like GATE, UPSC, CAT, JEE, NEET, banks, SSC, Railways among other exams. Since its inception in 2015, the company has raised $10 million from Times Internet in 2019. It had posted net revenue of Rs 24 crore in FY20 while net loss stood at Rs 33 crore in the fiscal year. The company’s CEO Shobhit Bhatnagar recently claimed that its net revenue stood at close to Rs 60 crore in FY21.

“If nothing goes wrong from here, both deals are likely to be closed by next month” added the second source.

Queries sent to Great Learning, Gradeup and Byju’s didn’t elicit any immediate response. We will update the story in case they do.

In the past 12 months, Byju’s has acquired WhiteHat Jr, Aakash Educational Services, Scholr and is in the final leg to acquire Toppr in a $150 million deal. The two new acquisitions are aimed to ramp up Byju’s play in test prep and upskilling segments. 

Experts watching the space say the aim of Byju’s is to now establish themselves in areas — both online and offline — where they did not have a strong foothold previously and their way to go about it is through acquisitions. 

If the deal with Great Learning materialises, the Bengaluru-based decacorn will have a strong presence in the upskilling space against upGrad. The Mumbai-based venture had recently raised $120 million in a round from Temasek.