Test Prep Leader Akash Institutes To Now Run Under Byju's Flagship

Decacorn Byju's has signed a deal to acquire India's test prep leader Aakash Educational Services for $1 billion. Since the deal is still private, there are no official announcements, only the words of several reports. Further, the deal will come through in the coming 2-3 months. With this deal, Aakash's founders, the Chaudhry family, will exit completely. Further, Blackstone (a major investor in Aakash) will swap a portion of its 37.5% equity in Aakash for Byju's stake. The deal, thus, will be one of the largest edtech acquisitions in the world.

Read More: All 7 Acquisitions By Unacademy So Far (6 of them happened in 2020!)

About Byju's

Byju's current value is at $12 billion as it has been on a fund-raising spree during the pandemic. Major investors include Facebook founder Mark Zuckerberg's Chan Zuckerberg Initiative, Tiger Global Management and Bond Capital.

Byju's was founded by Byju Raveendran, a former teacher and the son of educators, who conceived the smartphone app in 2011. The app caters to students from kindergarten to the 12th grade and has been adding over 5 million users a month. India has about 250 million students in the K-12 grades. The app provides lessons in maths and science through video animations and games.

About Aakash Institute

Blackstone Group-backed Aakash Educational Services runs Aakash Institute, which has over 200 brick and mortar centres and tutors students to gain entry into the country's elite engineering and medical schools. Its student count is over 250,000, according to its website. While online learning startups have thrived, offline tutoring centres have been badly hit by the pandemic, which has closed schools and tutoring centres since March last year.

Aakash Insitute, in November 2020 had appointed Abhishek Maheshwari as CEO. Well, before Aakash, Maheshwari was the President of International Business for Byju's. There, he was responsible for Byju's global growth. But Byju's has several times in the past stated that it will not personally venture into the offline education set.

But, Divya Gokulnath, at a TiE Conference, said that she believes that the new normal will not be 100% online. Instead, Byju’s will be that place where students come home and revise concepts. Schools will include online learning, but online cannot replace the school system. She also said that online can teach you hard skills, core concepts and the textbook notes, but empathy, team building and such soft-skills come in a social environment. The future is "blended learning", she believes.

Hence, this acquisition may be a step into venturing into blended learning.