World’s most valued online education company Byju’s—a leader in the K–12 education segment—is looking to strengthen its presence in the competitive exam preparation space by acquiring established players from that space that might otherwise get in the way of the company’s sprawling expansion.
A report by local media Entrackr said the Bengaluru-based edtech firm is in talks with two startups, upskilling platform Great Learning and test prep helper Gradeup, for acquisitions that will bolster its capabilities in the test prep space where it faces head-on competition from SoftBank-backed Unacademy.
Citing a source who did not wish to be named, the report said Byju’s is willing to pay USD 330 to 350 million to buy eight-year-old Great Learning.
“For Gradeup, Byju’s will shell out anywhere between USD 40–50 million. This acquisition would strengthen Byju’s game in the test preparation segment against Unacademy,” another source told Entrackr.
While Great Learning is a bootstrapped company that offers higher education in courses such as data science, artificial intelligence, among others, Gradeup is backed by Times Internet and has raised a total of USD 10 million till now. Five-year-old Gradeup provides online education content for aspirants who are preparing for engineering, management, bank, and government job exams.
These two acquisitions will help Byju’s to further its aim of becoming a one-stop-solution for all types of education content. While it currently dominates the K–12 space, where it still needs to guard its turf from smaller rivals like Vedantu and Toppr, it faces stiff competition with Unacademy in the test prep space.
A joint report published last year by Omidyar Network India and RedSeer Consulting, said the online test-preparation market (excluding government or civil service test preparation) in India is worth USD 55 million. It said approximately 1.6 million students use edtech platforms to assist their test preparation. Meanwhile, the online government test-prep coaching in India is a USD 23 million market, with preparation for administrative and banking jobs being the leading segments.
The company that has plans to go public in the next couple years has been on an acquisition spree. It recently acquired an offline chain of tuition centers Aakash Educational Services for a whopping USD 950 million—its largest acquisition that overshadowed its previous biggest buyout of USD 300 million of Whitehat Jr in 2020. According to several media reports, it’s also in the final stage of discussions to acquire its smaller rival Toppr for USD 150 million.
After raising USD 1 billion from Facebook co-founder Eduardo Saverin’s fund B Capital, along with Baron Funds, Byju’s is reportedly raising another round of about USD 150 million from UBS Group AG. This round of funding will value the company at about USD 16.5 billion, making it the most valuable Indian startup.