Byju's spends $2 billion for acquisitions over six months, adds Great Learning, Toppr to list

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Bengaluru: Edtech major Byju’s continues to be on its acquisition spree.

The country’s highest valued startup has now acquired professional and higher education platform Great Learning for $600 million in a cash-and-stock deal. Just last week, it snagged US-based Epic for $500 million to boost its overseas business.

After acquiring brick-and-mortar coaching network Aakash Institute for close to $1 billion, Great Learning is now the Bengaluru-based company’s second biggest acquisition.

Byju’s has also closed the acquisition of smaller rival Toppr in a $150 million deal, which too is a mix of stock and cash, sources aware of the matter said. “ Two-third of the transaction is going to be in stock and the rest is in cash..” said a person in the know of the matter.

Byju’s has now spent over $2 billion for these acquisitions over the last six months or so, triggering consolidation in an industry which has gained due to the pandemic.

Byju’s cofounder and chief executive, Byju Raveendran told ET the company has cash of $1 billion after financing these acquisitions. The capital will be used as investment to scale these new platforms, he said.

Presently, it is valued at $16.5 billion, the most for a domestic privately held startup.

Byju’s has earmarked $400 million of investment into the professional skilling and life-long learning segment, taking the total commitment for this vertical to $1 billion.

“With this acquisition, we now have a big presence in three verticals — schools, test prep and the higher education and upskilling segment. Most of these platforms can be scaled up globally except for test prep where we will focus only on India through Aakash,” Raveendran told ET.

“We’ll add more courses and also spend on creating brand awareness and going deeper into new markets where they’ve got good traction. Just like for test prep we depend on Aakash, for upskilling we’ll depend on Great Learning.”

Based out of Singapore, Great Learning is an online professional and higher education firm with presence in about 160 countries–with India being its largest market.

Great Learning, cofounder & CEO, Mohan Lakhamraju, said the company has been bootstrapped over the last eight years.

Seeing the exponential growth in its business prompted it to go for a strategic investor like Byju’s, instead of a financial investor, he said. “We crossed an annualised run rate of $100 million a few months ago and we’ve been able to accomplish that without requiring external funding.

Great Learning was a nominee in the Bootstrap Champ category for ET Startup Awards 2020.

The Byju’s transaction consists of cash, stock and earnout. Because we have been bootstrapped, Great Learning has almost 25% ownership by the employees and the team. So the team has a significant outcome out of this, and I’m grateful I can do this for the team,” said Lakhamraju.

Great Learning clocked a revenue of over $60 million for the financial year ending March 31,2021. It has a team of 1,500 and all of them are now part of Byju’s. According to Raveendran the Bengaluru-based startup is also looking to hire to scale up the new acquisitions it has made. It offers courses including data science, business analytics, cloud computing and others. It also enables job placement and about 500 companies have hired through the platform, Lakhamraju added.

As for Mumbai-based Toppr, the Startup offers products and services for K-12 students. During the pandemic, its users grew from 15 million to 35 million in around nine months, according to reports. Last year, it launched School OS, an operating system for schools to run online.

An email query sent to Toppr’s cofounder Zishaan Hayath, remained unanswered while Raveendran declined to comment on the specific deal.

Byju’s is also in talks to acquire test prep startup Gradeup, sources said. Raveendran declined to comment on the development.

In April, Byju’s launched its “Future School” offering, a product through which it is entering markets like the US, the UK, Brazil, Indonesia and Mexico. While it raised around $1 billion in 2020 from global and domestic investors, the edtech major has mopped up almost $1.5 billion over the last few months from investors including the UBS Group, Blackstone, Abu Dhabi’s sovereign fund ADQ and others.

Some of its early backers include Lightspeed Venture Partners, Qatar Investment Authority, Owl Ventures, General Atlantic, Tiger Global, Tencent, Verlinvest and Sofina.

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