Byju’s gets 2-month extension to pay Aakash shareholders

By Nishant Maher

  • 29 Jun 2022

Edtech decacorn Byju’s has sought and received a 2-month extension on some payments that were due to Blackstone and the founding family of Aakash Educational Services, two people familiar with the development said.  

Both Blackstone and Aakash founders agreed with the extension sought by Byju's, the people cited above said. 

Byju’s announced the acquisition of Aakash Educational in April 2021 in a $1billion cash and stock deal.  

Aakash's shareholders received partial payment in 2021. 

The Morning Context reported earlier today that Aakash and Blackstone may serve Byju's notice for non-payment. A Bloomberg report, which also reported on the payment delay related to the Aakash acquisition, said earlier today that Blackstone had opted to defer some of the payments to this year.  

"Aakash is our most successful acquisition till date and we are very proud to have them in our fold. The acquisition process of Aakash is fully on track and all payments are expected to be completed by the agreed upon date ie August 2022," a Byju's spokesperson said. 

Blackstone declined to comment. 

"Money in lieu of AESL equity was to be paid to Aakash promoters in different tranches. Some tranche has come in and some scheduled to come in due course of time. We have filed for a merger of the entities and teams are working towards its completion," an Aakash spokesperson said.  

Aakash Educational, as of now, stands as one of edtech giant Byju’s biggest acquisitions in a basket of multiple others across the world. But notably, even unicorns are facing headwinds with the onset of a prevailing funding winter due to global market volatility. This has led to a decline in valuations of companies across the globe. Many startups have also laid off employees to cope with the slowdown.   

The decacorn made 2 notable acquisitions this year. In July, VCCircle reported that Byju’s will spend $750 million to buy Mumbai-based Toppr and Singapore-based Great Learning. 

Byju’s was in discussions to acquire one of two US-based edtech companies, Chegg Inc. or 2U Inc., people familiar with the matter told Bloomberg in May. It has previously sewn up deals to acquire companies in India, US and Austria. 

In a conversation dated May, Aakash Educational’s co-founder and managing director Aakash Chaudhry told VCCircle that the test prep platform is eyeing a 40% growth in its FY23 revenue, to Rs 2,000 crore as the company intends to bet big on the offline business at an aggressive pace. He also said that Aakash will look to add 75 more centres this year. 

The education pioneer is India’s most valuable startup, with a valuation of $22 billion, according to the market researcher CB Insights. Its backers also include Silver Lake Management, Naspers Ltd., and Mary Meeker’s Bond Capital. The edtech provider has about 115 million students using its online learning platform, with 7 million of them paying annual subscriptions. 

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