Aakash Educational Services Limited (AESL) & Byjus have entered a billion-dollar deal with Byjus acquiring AESL for $1 Billion, confirmed Byjus on Monday 5th April. This is being termed as the biggest deal in the educational sector as two leading companies in the sector have joined hands. In January, a BloombergQuint article reported that the Chaudhry family (who runs Aakash Institute) will exit the firm completely and private equity firm Blackstone will swap its 37.5% equity in Aakash for Byjus stake.
AESL was founded in 1998 by J. C. Chaudhry. It is a test preparatory centre, which helps students in preparing for competitive exams in the field of medicine & engineering. These exams include NEET, AIIMS, JIPMER, JEE, etc. Over the years Aakash established many centres across the country, that is, across 130 cities, becoming the no.1 & the most preferred test preparatory centre. In 2019, a private equity firm Blackstone invested $13.5 billion for a 37.5% stake in AESL.
Byjus, on the other hand, has always established itself as an ed-tech company. It was founded by Byju Raveendran & Divya Gokulnath in 2011. In a short span of 10 years, Byjus captured the attention of one & all. It prepared students for competitive exams, provided solutions for those exams, and also made the syllabus of the exam look simpler & easy. It caters to Classes 1st to 12th, both CBSE & State Boards, and also covers all the competitive exams like NEET, UPSC, JEE, CAT, etc. With actor Shah Rukh Khan as its brand ambassador, Byjus scaled new heights in the education sector.
Between March 2020 to November 2020, Byjus claimed to have added 25mn new students with an annual paid subscription of 4.2mn. This increased its user base to 75mn. This start up is backed by investors like Facebook founder Mark Zuckerberg’s Chan-Zuckerberg Initiative, Naspers, and Light speed Venture Partners. In 2020, it raised over $1.25 billion and was valued at $12 billion after it raised around $200 million in November 2020 from investment firms BlackRock and T Rowe Price. Byjus was also instrumental in acquiring White Hat Jr for $300 million in August 2020. It is been speculated that Byjus is in talks with more investors to raise around $600-$700mn at a $15 billion valuation.
As online education gain momentum during the last year owning to the Coronavirus pandemic, Byjus gaining AESL comes at the right time. Byjus & Aakash are the most trusted companies in the education sector and this acquisition brought together those two powerhouses. Many students who may have an issue with any subject can have easy access to these two online avenues. In the last year, the number of online classes has increased. There are pros & cons of the same but that is a topic which can be debated in another article.
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