Byju’s, which raised over $1.25 billion in 2020, acquired WhiteHat Jr, an online coding school for young kids, for $300 million last August
Edtech firms raised $2.1 billion in 2020, the highest of all sectors, against $426 million in 2019, according to data by Venture Intelligence
Bengaluru: Edtech firm Byju’s is in advanced talks to acquire smaller rival online learning startup Toppr for about $150-160 million, a deal that could lead to further consolidation in the sector, said two people familiar with the development.
Both Byju’s and Toppr operate in the K-12 (Kindergarten to Class 12) learning space.
Edtech unicorns Byju’s and Unacademy, which got a shot in the arm due to the pandemic-led lockdown when learning went online, have been on an acquisition spree and continue to scout for strategic buyouts, after raising multiple rounds of funding last year.
Byju’s, which raised over $1.25 billion in 2020 and is currently valued at $12 billion, acquired WhiteHat Jr, an online coding school for young kids, 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 the first person, requesting not to be named.
Entrackr first reported on the Byju's-Toppr deal on Monday.
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 firms 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 - NeoStencil, Mastree, PrepLadder, Kreatryx, CodeChef and Coursavy.
Unacademy’s founder and CEO Gaurav Munjal in an interview in January said 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 underpenetrated. 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, head of consumer media and technology, 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.
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