Home/ Companies / News/  Byju’s nears deal to acquire rival Toppr

Edtech unicorn Byju’s is in advanced talks to acquire smaller rival Toppr for $150-160 million, two people familiar with the development said, as consolidation continues in India’s booming online learning sector. Both Byju’s and Toppr operate in the K-12 (Kindergarten to Class 12) learning space.

Edtech firms Byju’s and Unacademy gained significantly last year as schools closed due to the coronavirus pandemic and students took to online classes.

After raising multiple rounds of funding last year, both edtech companies have been on an acquisition spree, and continue to scout for strategic buyouts.

Byju's continues to scout for buyouts after raising funding across multiple rounds last year
View Full Image
Byju's continues to scout for buyouts after raising funding across multiple rounds last year

Byju’s, which raised more than $1.25 billion in 2020 and is currently valued at $12 billion, acquired WhiteHat Jr, an online coding school for young children, for $300 million last August.

“Business momentum for Byju’s has not slowed down even beyond the pandemic. With the Toppr acquisition, Byju’s will strengthen its focus in the K-12 space. Toppr will bring tremendous value to the table for Byju’s. At this stage, Byju’s is eyeing both international expansion and strategic inorganic growth," said one of the two people cited above, asking not to be named.

Byju’s is also closing another transaction to buy offline test preparation firm Aakash Educational Services for $1 billion.

Byju’s declined to comment, and Toppr didn’t respond to queries.

Edtech companies raised $2.1 billion in 2020, the highest of all sectors, against $426 million in 2019, according to data by Venture Intelligence. Mumbai-based Toppr also raised 350 crore last year from Foundation Holdings.

Unacademy, which turned unicorn last year and is valued at around $2 billion, acquired multiple startups in recent months, primarily in the test prep space, including NeoStencil, Mastree, PrepLadder, Kreatryx, CodeChef and Coursavy.

Unacademy founder and chief executive Gaurav Munjal said in a January interview that there are 2-3 more acquisitions in the pipeline.

Munjal also said for an acquisition, “We are looking for a team or a particularly unique selling proposition that they have, but we don’t."

India’s edtech sector is poised to reach $12 billion by 2025 on the back of continued investor interest, rising urbanization and internet users among other factors, said a February report on India’s e-learning sector by Anand Rathi Investment Banking.

“While the deal concentration has been higher in the K-12 segment, test preparation and vocational, re-skilling and certification are expected to be the fastest growing segments due to shifts in demand and better internet infrastructure. The re-skilling and certification segment will grow owing to increased skill-gaps and rising unemployment," the report said.

“It is simple—that there is a big market opportunity when it comes to edtech and it is growing really fast while still being under-penetrated. There are leaders, which have emerged in multiple segments, but there are still large white spaces in terms of opportunity. These leaders are taking an ‘umbrella approach’ of catering to different markets right from K-12 to early learning and test prep," Karan Mohla, executive director and head of consumer media and technology at Chiratae Ventures, said in a recent interaction.

However, what differentiates them would be the differentiated supply (in terms of teachers and courses) that they are building, he said.

Tarush Bhalla contributed to the story.

Catch all the Corporate news and Updates on Live Mint. Download The Mint News App to get Daily Market Updates & Live Business News.
More Less
Updated: 16 Feb 2021, 06:12 AM IST
Next Story
Recommended For You
Get alerts on WhatsApp
Set Preferences My Reads Watchlist Feedback Redeem a Gift Card Logout