Baiju app paid $ 1 billion for Blackstone, backed test, Prep leader Akash

 The Bangalore-headquartered Byju App is valued at $ 12 billion and is in the race to raise funds as the epidemic has boosted its online text demand.

India's largest online-education startup, Biju, has signed an agreement to buy brick and mortar test prep leader Aakash Educational Services Ltd for $ 1 billion, according to a negotiator.

The deal for one of the largest edtech acquisitions in the world should close within the next two or three months, said the person, who did not want the information to be private.

The Bangalore-headquartered interest is valued at $ 12 billion and is in a race to raise funds as the epidemic has boosted demand for its online lessons. India's second most valuable startup has been co-founded by Facebook founder Mark Zuckerberg's Chan Zuckerberg Initiative, Tiger Global Management and Bond Capital, Silicon Valley investor Mary Meeker.

During an email and call to New Delhi-based Aakash Educational Services, a spokesperson for Byju declined to comment and its chief executive officer Aakash Chaudhary did not respond.

The Akash Institute, a Blackstone group-backed Akash Educational Services, runs the Akash Institute, which has more than 200 brick and mortar centers and tutors students to gain entry into the country's elite engineering and medical schools. According to its website its student count is more than 250,000.

While online learning startups have attempted, offline tuition centers have been badly affected by the epidemic, which has led to the closure of schools and tuition centers since March last year.

In the Byju agreement, Akash's founder, the Chaudhary family, will exit completely, while Blackstone swaps a portion of its 37.5% equity in Akash for Baku's stake, the person said.

Byju was founded by Byju Raveendran, a former teacher and son of teachers who conceived the smartphone app in 2011. The app caters to students from kindergarten to 12th grade, and is adding more than 5 million users every month. There are around 250 million students from India in K-12 grades. The application provides lessons in mathematics and science through video animations and games.

More than 70 million users logged in from more than 1,700 cities across the country, Biju said last September when it announced fund raising. Of these, more than 4.5 million are paid users. It is aiming to double its revenue to $ 1 billion in the current fiscal year ending in March 2021.