To help the company gain foothold in higher education space
Byju’s on Monday said it has acquired edtech start-up Great Learning for $600 million in a cash, stock and earnout deal. The move will help the firm, which is valued at $16.5 billion, gain a foothold in the professional upskilling and higher education space.
The acquisition comes days after Byju’s acquired US-based kids digital reading platform Epic in a $500-million deal. Earlier this year, the Bengaluru-based firm sealed its biggest M&A (merger and acquisition) deal when it acquired brick-and-mortar test prep service provider Aakash Educational Services in a $1-billion deal. So far this year, Byju’s has spent over $2 billion on acquisitions, including Indian rival Toppr which is yet to be officially announced by the company.
Byju’s said that it will spend another $400 million to “accelerate” Great Learning’s growth, thereby taking its total investment commitment to the higher education space to about $1 billion. Founded in 2013, Mohan Lakhamraju-led Great learning that is headquartered in Singapore claims to have delivered more than 60 million hours of learning to 1.5 million learners from over 170 countries. It follows a mentored learning model and has a network of over 2,800 mentors. The company services more than 500 corporate partners for their upskilling and talent needs.
The pandemic has effected changes in regular working models and nudged companies to expedite technological push creating demand for more tech-based employee roles. Firms are now increasingly looking to upskill their employees, boosting the growth of this edtech category. Start-ups like upGrad, Eruditus and Simplilearn operate in this space.
“This partnership brings together Byju’s technology and content expertise with Great Learning’s sought-after professional courses at a significant time when the Covid-19 pandemic and evolving industry dynamics have encouraged professionals in India and globally to upskill themselves,” Byju’s said in a statement. “With our combined strength, we aim to become a global market leader in this segment,” said founder & CEO Byju Raveendran.
Great Learning will continue to operate as an independent unit within the Byju’s group under the leadership of its founder & CEO Mohan Lakhamraju and co-founders Hari Nair and Arjun Nair.
Byju’s is backed by a slew of marquee investors, including General Atlantic, the Chan-Zuckerberg Initiative, Naspers, Silver Lake and Tiger Global. The start-up claims to service over 100 million students worldwide. Byju’s, which has been leading the funding deals in the local edtech space, has allocated the bulk of the capital towards suitable M&As. In 2020, Byju’s secured over $1 billion from investors. Earlier this year, it raised close to $1.5 billion from a clutch of investors, including Facebook co-founder Eduardo Saverin’s B Capital Group, UBS Group and Blackston in tranches. Byju’s claims to have added 45 million new students in just six months during the lockdown.
Analysts at RBSA Advisors estimate the local online education offerings for classes 1 to 12 to increase by as much as 6.3 times by 2022, creating a $1.7-billion market, while the post-K12 market is set to grow by an expected 3.7 times to touch $1.8 billion. This growth is projected to be driven by K12, higher education, test preparation and upskilling categories, they said.