New Chapter: Byju’s pays $500 m for Epic purchase

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July 22, 2021 4:30 AM

The transaction comes a little over three months after the Bengaluru-based start-up acquired Indian brick-and-mortar test prep service provider Aakash Educational Services in a near $1-billion deal, one of the biggest in the local ed-tech space.

The deal with Epic marks Byju's second-biggest deal.

Ed-tech major Byju’s on Wednesday said it has acquired US-based kids digital reading platform Epic in a $500-million deal as it looks to make deeper inroads into the key overseas market.

The transaction comes a little over three months after the Bengaluru-based start-up acquired Indian brick-and-mortar test prep service provider Aakash Educational Services in a near $1-billion deal, one of the biggest in the local ed-tech space. The deal with Epic marks Byju’s second-biggest deal.

Byju’s said the acquisition of Epic, that caters to kids aged 12 and under, will help broaden its footprint in the US as the firm will get access to Epic’s rich global user base that is said to have doubled over the last year and now comprises more than 2 million teachers and 50 million kids. Epic CEO and co-founder Suren Markosian and other co-founder Kevin Donahue will, however, remain in their roles.

The US-based platform’s interactive reading model for kids is in sync with the long-term growth strategy of Byju’s that counts the K-12 segment as a focus area. Founder and CEO Byju Raveendran said the company’s partnership with Epic will enable it to create engaging and interactive reading and learning experiences for children globally.

Byju’s has also earmarked a significant $1 billion worth of investments for North America. The company that has been chalking out a broad international foray for sometime had acquired US-based Osmo, a maker of educational games in a $120-million deal in 2019.

“Byju’s has aggressive plans for international and US market expansion, and the acquisition with Epic will not only lead to significant investments in technology that will help to further personalised learning for students, but also enable Byju’s to become a natural part of America’s learning culture,” the company said in a statement.

Valued at $16.5 billion, 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 ed-tech space, has allocated the bulk of the capital towards suitable M&As. The firm is understood to have acquired Indian rival Toppr in a transaction estimated to be over $100 million besides lining up acquisitions of other related businesses, including Great Learning and Gradeup.

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 Blackstone, in tranches.

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