Why is Byju's Buying Aakash Institute?
Byju's plan of acquiring Aakash Institute and a surprise entry has made the ed-tech space very interesting. All within a span of 2 days! What's in store? ReadOn
A tale of two companies
In the year 1988, JC Chaudhary had a dream. A dream to improve the quality of education so that students were better equipped to crack high-stake examinations of medical and engineering. And with that dream, Aakash Institute was formed: with just 1 classroom and 12 students.
Byju's also had a similar start...
Raveendran Byju's journey started with him helping his friends prepare for CAT.
When he himself appeared for the exams in 2003, he scored a 100 percentile!
He then started teaching full time, and in 2015 launched the app "Byju's".
With backings from stalwarts like Mark Zuckerberg (the guy's everywhere!) and Tiger Global, the company has been on an acquisition spree. Last year it acquired Whitehat Jr. (remember Wolf Gupta?).
And now, it's eyeing Aakash Institute.
What do we know about the deal?
It will be one of the biggest ed-tech acquisition in the world! As per reports, Byju's will settle the deal as:
Aakash family (cash payout) = $0.3 bn
Blackstone (PE Fund) = $12 billion x 5% = $0.6 bn (will get 5% stake inByju's)
The total value of the deal = $1 bn. approx.
But, what will Byju's get in return?
Byju's will inherit, Aakash Institute's 200 coaching centres and a student base of 250K spread across India.
But why would Byju's (an ed-tech platform) want to acquire Aakash Institute (an institute of physical coaching centres)?
The market is full of speculations and theories.
Some say, to justify the high valuation it had to grow its customer base at a breakneck pace. No better way to this than acquiring a business, no?
Or, is the company aiming to go offline? After all, brands like Lenskart, Myntra, Pepperfry and Nykaa have also expanded offline.
But, Raveendran Byju, the man himself said in Oct 2020, "We are very clear that what we have created is to have more active learners, especially when they learn at home complementing the synchronous learning happening at schools. We’ll stay focussed on what we know best"
Did they change their stance? Afterall, Aakash has a strong brand presence and an army of well-trained teachers in the competitive exam sector.
Worth giving a shot, right?
While we were researching how this massively valued acquisition will change the ed-tech space, the game got all the more interesting with the entry of Amazon Academy.
Amazon has now entered the ed-tech space to prepare students for JEE and other competitive exams.
The ed-tech WAR has just begun!
By Yavantika Malani
Thousands of readers get our daily updates directly on WhatsApp! 👇 Join now!