New Delhi: Indian edtech giant Byju has announced plans to raise $250 million through convertible notes to fund its acquisition of coaching institute Aakash Educational Services. The funding round will be led by existing investors General Atlantic, Owl Ventures, and Tiger Global, among others.
Aakash, which has a presence in more than 200 cities in India, provides coaching for medical and engineering entrance exams. Byju’s, which has more than 100 million registered students globally, has been expanding its presence in the test preparation market through acquisitions like Aakash.
The acquisition of Aakash is expected to help Byju’s increase its market share in the test preparation space, which is expected to be worth $18 billion in India by 2022, according to consulting firm RedSeer.
Byju’s, which is valued at $16.5 billion, has been expanding its offerings beyond test preparation into areas like coding and extracurricular activities. The company has also been expanding internationally, with a presence in the Middle East, the United States, and the United Kingdom.
The edtech sector in India has seen significant growth in the past year as the COVID-19 pandemic forced schools and colleges to shut down and students turned to online learning. Byju’s saw its user base grow by 45% during the pandemic, and the company raised $1 billion in funding last year.
The convertible notes being offered by Byju will be due in 2027 and can be converted into equity shares of the company at a future date. The company has not disclosed the terms of the notes or the valuation at which they will be issued.
The pre-IPO funding will give Byju additional capital to fund its growth and expansion plans. The company has been rumoured to be considering an IPO later this year, which could value it at $15-18 billion.
In a statement, Byju’s founder and CEO, Byju Raveendran, said, “We are excited to welcome Aakash Educational Services to Byju’s family. The pandemic has accelerated the adoption of digital learning, and we are bullish on the significant opportunity that this presents us.”
