Here's why BYJU’S may want to spend a billion dollars on physical coaching centres

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Here's why BYJU’S may want to spend a billion dollars on physical coaching centres
BCCL
  • BYJU’S is reportedly set to acquire the brick and mortar preparatory services institute Aakash Educational Services for a whopping $1 billion.
  • If the deal goes through, it will become one of the biggest edtech deals in the world.
  • Interestingly, Aakash Educational Services in November 2020 had appointed Abhishek Maheshwari as Chief Executive Officer (CEO) of the company. Maheshwari was earlier the President of International Business for BYJU’S.
India’s edtech unicorn BYJU’S is reportedly set to acquire the brick and mortar preparatory services institute Aakash Educational Services for a whopping $1 billion. If the deal goes through, it will become one of the biggest edtech deals in the world.

Aakash Educational Services runs over 200 coaching institutes across the country and has a student count of more than 2,50,000, which would give BYJU’S a direct entry into the test preparation market.

Interestingly, Aakash Educational Services in November 2020 had appointed Abhishek Maheshwari as Chief Executive Officer (CEO) of the company. And before joining Aakash, Maheshwari was the President of International Business for BYJU’S, where he was responsible for BYJU’S global growth.

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While BYJU'S declined to comment on the matter, Aakash Educational Services Limited (AESL) confirmed that it is in talks with Byju's for building a strong partnership. However, the company said that the founders JC Chaudhry and Aakash Chaudhry remain committed and will continue to run Aakash Educational Services along with its management team with the same passion and commitment.

"Putting these speculations to rest, we would like to state that AESL is on a mission to build India's largest digitally-enabled, omni-channel education company. We will accelerate our digital transformation and deliver phenomenal value to our students. We will rapidly expand our omni channel & digital offerings, as we embark on the next trajectory of quality education & growth. We remain true to our Founder's motto of ‘Student First,' enabling us to deliver long-term value to our students, employees, investors and other stakeholders," said the company.

When we spoke with BYJU’S founder Byju Raveendran in October 2020, about a possible entry into the brick and mortar school market, here’s what he had to say. “Conceptually, there is a strong business model there, but it's a very risky space in India to get into also. You never know what time the regulations can hit you in the school space,” said the billionaire founder.

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Talking about whether there would be a BYJU’S school, which could take the $12 billion edtech giant’s model offline, Raveendran had said, “No, there won’t be. 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,” he had said.

But BYJU’S hasn’t been completely defiant about offline learning, with the founders having always said that blended learning is the future.

For BYJU’S, this would be a big cheque to dole out. It recently acquired coding startup WhiteHat Jr for $300 million in August 2020, and that has been mired in controversy and legal tangles over its advertisements and teaching methods.
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Byju’s acquisition spree so far
Acquired companyExpertiseAmount paid by BYJU’S
OsmoAugmented Reality game maker and learning platform for kids$120 million
White Hat JrCoding startup for kids$300 million
LabInAppLab simulation startupUndisclosed
TutorVistaOnline tutoring in the USUndisclosed
Math AdventuresActivity-based math learning platformUndisclosed
VidyarthaAssessment platformUndisclosed

BYJU’S is known to enter new territories through acquisitions. When BYJU’S set its sights on international shores, it went ahead through the acquisition route. “We are not starting from zero here; we have made two good acquisitions which will help us accelerate our international expansion plans. One is Osmo which is a Palo Alto-based company, they are expected to close this year with a $100 million revenue. And the other is White Hat Jr, where we will be using their model of having teachers in India helping students around the world,” Raveendran had told Business Insider in an earlier interview.

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