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Byju’s looks to gobble smaller rival Toppr for USD 150 million

Written by Moulishree Srivastava Published on 

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If the talks go through, it would be one of the largest consolidation deals in the Indian edtech space.

Indian edtech decacorn Byju’s is looking to scoop up smaller rival Toppr for about USD 150 million in a bid to clear competition and fuel its inorganic growth.

“The two companies have been in talks for over two months and it has now reached an advanced stage,” local media Entrackr quoted a source who is privy to the discussions. “The deal that would value over USD 150 million is likely to be closed and announced soon.”

“Byju’s sees Toppr as a formidable player in K-12 space and the acquisition will bolster its positioning in the space. The transaction will largely consist of cash along with a little equity,” one of the three sources told Entrackr.

Founded in 2013 by Zishaan Hayath, Toppr has been one of the major competitors in the K-12 segment. Other than Byju’s, it is the only well-known platform to offer self-learning, pre-recorded modules. Other major K-12 focused edtech startups like Vedantu deploy instructor-led models. Toppr has over 13 million registered users, whereas Byju’s registered user base stands at over 64 million.

Read this: Coding, campaign, and controversies: WhiteHat Jr’s journey from highflyer to the eye of storm

Toppr is backed by Eight Roads Ventures, Helion Venture Partners, Elevation Capital (formerly SAIF Partners), and Alteria Capital, among others, and has raised over USD 107 million. It last raised USD 46 million in equity and debt in its Series D round in July 2020.

If the talks go through, it would be one of the largest consolidation deals in the Indian edtech space, which is likely to reach USD 10.4 billion in size by 2025. This would leave Byju’s and Vedantu as major players in the K-12 segment, while Unacademy will be the dominant player in the test preparation space.

Flushed with VC money, Byju’s has been on an acquisition spree since last year. Last November, Byju’s was reportedly close to raising USD 200 million from BlackRock and T Rowe Price.

This would be Byju’s third high-profile acquisition in the last 12 months. Last month, Bjyu’s reportedly signed an agreement to acquire brick-and-mortar chain of tuition centers, Aakash Education Services, at USD 1 billion. In August 2020, the world’s most valued edtech startup, acquired kids coding learning platform WhiteHat Jr for USD 300 million.

Prior to that, Byju’s was reported to be in advance discussions with local language-focused doubt-solving platform Doubtnut. However, the deal did not materialize as two companies couldn’t agree on the valuation.

“The K12 EdTech-addressable market is projected to be worth USD 1.7 billion by 2022, up more than six-fold from USD 265 MN in 2019,” said  Anil Kumar, Abhishek Gupta, and Artham Khetan in a recent research note. The number of students enrolled in grades 1 to 12 is expected to go up to 110.5 million from 25 million in the same time period, it added.

Overall, India continues to be one of the largest education market, pegged to have crossed USD 117 billion in FY 20,  in the world with over 360 million learners, according to another report by IVCA (Indian Private Equity and Venture Capital Association)-PGA Labs.

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