The deal between Byju’s and Aakash was first reported by Bloomberg in January. Although both companies have not provided any details about the transaction, Byju’s has paid “close to $1 billion” in cash and equity for the merger, TechCrunch reported, citing people familiar with the development.
As per the terms of the deal made public through the press statement, Aakash will continue to function independently after the transaction completes. Founders JC Chaudhry and Aakash Chaudhry will also continue to stay with the firm post its acquisition.
The coronavirus pandemic has helped Byju’s reach new levels as students are mostly staying indoors and taking remote classes. The company said that in just six months during the national lockdown, it had added 45 million new students to the platform. It is claimed to have over 5.5 million annual paid subscriptions out of the userbase of 80 million students cumulatively learning from its app — with an annual renewal rate of 86 percent.
“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,” said Byju Raveendran, Founder and CEO, Byju’s.
Backed by the US-based investment management firm Blackstone, Aakash has gained a huge popularity in India for its test preparatory services. That popularity may help Byju’s to expand its platform. The acquisition is also expected to allow both Aakash and Byju’s to reach smaller towns and cities in the country.
“Together with Byju’s, we will work towards building an omni-channel learning offering that will accelerate test-prep experience to the next level,” said Aakash Chaudhry, Managing Director, Aakash Educational Services.
Global professional services firm EY was the exclusive financial advisor for Byju’s on the transaction, while Phoenix Advisers was the exclusive advisor for Aakash.
Last year, Byju’s acquired Mumbai-based code-learning platform WhiteHat Jr in a $300 million (roughly Rs. 2,200 crores) deal. The company in June last year also received an investment from Mary Meeker’s equity fund Bond that was said to be amounting under $100 million (roughly Rs. 730 crores)