Unacademy mulls partnership with Byju’s-owned Aakash: Report
- ByStartupStory | March 24, 2023
Unacademy and Aakash, which is owned by BYJU’S, are reportedly exploring the possibility of merging, but both companies have denied the development.
The talks are said to be in early stages and may not lead to a transaction, with no term sheet level discussions having taken place yet, according to a reports. If a deal is reached, it could involve a combination of cash and stock, and the merged entity may consider an IPO rather than Aakash pursuing a public listing on its own.
General Atlantic, Tiger Global, and Sequoia Capital are among the common backers of both Unacademy and Aakash.
According to the report, these investors were keen on a merger between the two edtech companies, as it could strengthen their case for a potential IPO. Over the past month, discussions have reportedly taken place between BYJU’S Co-founder Byju Raveendran and Unacademy Founder Gaurav Munjal. If a deal is finalised, Munjal is expected to head the merged entity, while Byju may be offered a position on the board, the report added.
In August 2021, Unacademy raised $440 million at a valuation of $3.4 billion, while in October 2022, BYJU’S secured $250 million in equity funding at a fixed valuation of $22 billion.
As part of the merger agreement, $100 million will be paid in cash, providing a lifeline for BYJU’S, which has been grappling with a liquidity crisis due to the prolonged due diligence process that has delayed its fundraising efforts.
According to reports, BYJU’S is considering issuing convertible notes worth up to $250 million through Aakash.
The report also indicates that Aakash’s sales for FY22 were around Rs 1,400 crore, and it is expected to exceed Rs 2,500 crore in the current year.
Should the merger proceed, the union of Unacademy and Aakash will create one of India’s largest tutoring organisations, with a robust presence in both online and offline test preparation markets.
In 2021, BYJU’S acquired Aakash, a traditional education company, for approximately $950 million in a deal that included both cash and stock components.
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