Post the transaction, Blackstone Group and Aakash Institute’s founders will hold a minority stake in Byju’s at a valuation of about $13 billion, founder Byju Raveendran said. “We will integrate Aakash’s expertise in test prep with our content and tech capabilities and will invest further capital into Aakash once the integration is done,” he told ET.
EY was the exclusive financial adviser for Byju’s for the Aakash deal, while Phoenix Advisers was the exclusive adviser for Aakash Educational Services.
Aakash Educational Services is the edtech decacorn’s second large acquisition in less than a year. It
scooped up WhitehatJr in a $300-million cash deal in August 2020.
Last week, the Bengaluru-based company
raised $460 million in a Series F funding round at a valuation of $13 billion. A major chunk of that capital will be used to finance the Aakash buyout, ET had reported on March 25. “We will continue to expand the offline footprint and Aakash will be the front end of all our test prep initiatives,” Raveendran said.
In 2019, Blackstone picked up 37.5% stake in Aakash Educational Services, valuing it at around $500 million. The pandemic, however, hurt the company’s growth plans as revenue dropped from Rs 1,200 crore as on March 31, 2020, to Rs 1,000 crore in 2020-21.
Having grown both organically and inorganically through acquisitions, Byju’s has seen a steady rise in its revenues and valuations. “The acquisition will help the company cross the billion-dollar mark in revenues in the next financial year. We are looking at closing the next year at $1.2-1.3 billion in revenues,” Raveendran said. The company’s current revenue run rate is around $800 million.
The acquisition spree
In 2019, Byju’s acquired US-based Osmo, a maker of educational games, for $120 million. “Today, Osmo is delivering a 4.5x growth and is clocking around $115 million in revenues and is expected to close FY22 at $200 million,” Raveendran said.
Though he refused to share details of how WhiteHatJr is performing, Raveendran said that the company is looking for international expansion and plans will be announced over the next four to six weeks.
is also in the final stages of acquiring Toppr for $150 million, which it may finance through internal cash reserves. “Other acquisitions are smaller in size and we have cash in hand. We will see how the final deal contours work out,” Raveendran said.
Post this transaction and the subsequent capital raise to fund the buyout, Raveendran, his wife Divya Gokulnath, and brother Riju Raveendran will own 26.09% in the company. Some of the company’s early backers include Lightspeed Venture Partners, Qatar Investment Authority, Owl Ventures, General Atlantic, Tiger Global, Tencent, Verlinvest and Sofina.