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Byju’s to Pay $1 Billion for Blackstone-Backed India Tutor

  • It signed a deal to buy test-prep outfit Aakash Educational
  • Online education has soared worldwide during the pandemic
Updated on

India’s biggest online-education startup Byju’s has signed a deal to acquire brick and mortar test prep leader Aakash Educational Services Ltd. for $1 billion, according to a person with knowledge of the talks.

The deal will be one of the largest edtech acquisitions in the world and is set to close in the next two or three months, said the person, who didn’t want to be identified as the information is private.

Bangalore-headquartered Byju’s is valued at $12 billion and has been on a fundraising spree as the pandemic has sent demand for its online lessons soaring. India’s second-most valuable startup is backed by the likes of Facebook Inc. founder Mark Zuckerberg’s Chan Zuckerberg Initiative, Tiger Global Management and Bond Capital, co-founded by Silicon Valley investor Mary Meeker.

Online education has become one of the hottest investment arenas during the pandemic, attracting investors betting that a prolonged lockdown will introduce parents and kids worldwide to a burgeoning format. That’s particularly true in India, where a scarcity of good teachers and quality learning material is encouraging students to try out widely accessible virtual classes. Byju’s itself has raised hundreds of millions of dollars over the past year from investors including BlackRock, Silver Lake and T. Rowe Price, while Unacademy in September secured financing in a round led by SoftBank Group Corp. at a $1.45 billion valuation.