Byju’s in advanced stages of talks to acquire Toppr in $150 million deal

By: |
February 16, 2021 3:15 AM

If the deal goes through, Byju’s will get access to Toppr’s base of subscribers and related user data. “In the digital space, it is largely about economies of scale. A lot of the business model will depend on the analytics which comes from the data they have,” said Anindya Mallick, partner at Deloitte.

Byju’s and Toppr did not respond to FE’s queries regarding the proposed transaction till the time of going to press.Byju’s and Toppr did not respond to FE’s queries regarding the proposed transaction till the time of going to press.

The country’s largest ed-tech firm, Byju’s is in advanced stages of talks to acquire rival, Toppr, industry sources said, indicating the transaction could be around $150 million. Byju’s latest acquisition target underlines its aggressive expansion at a time when online learning is catching on.

Byju’s and Toppr did not respond to FE’s queries regarding the proposed transaction till the time of going to press.

If the deal goes through, Byju’s will get access to Toppr’s base of subscribers and related user data. “In the digital space, it is largely about economies of scale. A lot of the business model will depend on the analytics which comes from the data they have,” said Anindya Mallick, partner at Deloitte.

Byju’s can use the data to launch more relevant products and tailor the existing ones to cater to the market better. “The organisation which has access to data, can predict where the market will be going in the future and have products and services around that will be the ones that will be the clear winner,” Mallick said.

Mumbai-based Toppr services the K-12 and test preparation market. It claims to have 35 million monthly active users. Byju’s may also have a desire to leverage what Toppr is trying to do with schools, said an industry expert on condition of anonymity. The company, for instance, has developed the Toppr School OS app that aggregates all school content on one platform, equipping authorities to bring their schools online.

Consolidation in the ed-tech space is likely to continue, said Ankur Pahwa, partner at EY. Companies will look at acquisitions to either add more courses so that they can build on their portfolio of offerings or to incorporate an omni-channel approach. Geographical expansion is another area that firms consider while making acquisitions, said Pahwa.

Flush with funds, Byju’s is also reportedly inking a deal to acquire brick and mortar test preparation company Aakash Educational Services in a whopping $1-billion deal. Last year, the Bengaluru-based company had acquired WhiteHat Jr in a $300-million transaction.

Last year, investors infused over $1 billion in Byju’s valuing the firm at more than $11 billion. In all, the firm has raised close to $2 billion. The company’s revenues have grown at a compounded 125% over the past three years to approximately $400 million.

“It is not about the content or curriculum. The opportunity is in terms of innovating on how we personalise this content in the way it is delivered to students. We can also innovate on the format…It has to be content first and technology as an enabler approach,” founder & CEO Byju Raveendran told FE in an interview last year.

Experts point out edtech is growing on the back of changes in the approach to education and the rapid rise in the use of smartphones. Of the three broad categories — K-12 supplementary teaching for grades 1-12, test-preparation and higher education — analysts at HSBC reckon K12 offers the most potential.

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