Exclusive: Byju’s in talks to acquire Vedantu for $800 Mn

Byju’s has emerged as the most prolific acquirer in the Indian startup ecosystem in the past year. It had already acquired seven companies in 2021 and is in talks to take over another one. According to two Entrackr sources, India’s most valued startup is now in talks with Vedantu for a potential acquisition.

“The talks are underway between the two companies for the past few weeks and have reached an advanced stage. Byju’s is offering a $700-800 million deal to Vedantu,” said one of the sources requesting anonymity. 

If the deal goes through, this will be the eighth acquisition for Byju’s in 2021. The company had recently taken over Toppr, Great Learning and US-based Epic in a cash and equity deal. While Byju’s spent around $1,250 million worth cash and stocks to acquire the three companies, it acquired Aakash Educational Services in a $1 billion deal. 

According to sources, Vedantu has also been in conversations with new and existing investors to raise a new round at a valuation of nearly $1 billion. “The investment talks have taken a back seat in the wake of Byju’s offer,” said the second person who also wished not to be named. Sources further said that the contours of the deal are almost finalised and if nothing goes wrong from here, the acquisition may materialise in a few weeks.

Byju’s has declined to offer comment for the story.

"It is completely false and no such discussions have taken place. We are in the process of closing a round of funding at a much higher valuation," said Vedantu CEO's Vamsi Krishna in a response to Entrackr's queries.

A year ago, Vedantu had raised $100 million at a post-money valuation of over $500 million, according to Fintrackr calculation. Importantly, three co-founders had also sold out secondary shares during its Series D round in July 2020. The company was in talks with KKR to raise about $100 million. However, it didn’t materialise.

Vedantu’s core offering covers online classes from grade 6 to 12 along with materials from grade 1 to 12 and JEE. The company also ventured into kids coding space (age bracket 6-12) in May 2020. Sources emphasised that Vedantu acquisition will tighten its dominance in the K-12 segment. 

Byju’s and Unacademy have emerged as top acquirers in the edtech space in the past two years. As of now, Byju’s has taken over 16 startups whereas its closest rival Unacademy has acquired 10 startups since its inception. The most recent acquisition by the Gaurav Munjal-led company was live game streaming platform Rheo Tv.

Update: The story has been updated to reflect Vedantu's response.