Indian edtech giant Byju’s says not acquiring Unacademy

Indian edtech giant Byju’s said on Thursday the firm and any of its subsidiaries are not engaging with rival Unacademy to explore an acquisition or merger, refuting a media report at a time when weakening global market conditions have sparked several consolidation plays in the industry.

Indian news outlet MoneyControl reported earlier that Byju’s physical tutor unit Aakash is in talks to acquire Unacademy. “We strongly deny that Byju’s is considering a merger of Unacademy into Aakash Educational Services. As a parent company, BYJU’S is committed to investing in the growth of Aakash Educational Services, which is growing at more than 50% year-on-year,” a Byju’s spokesperson said in a statement.

“We have had absolutely no discussions with Unacademy or any other player to merge with Aakash Educational Services. Aakash is a market leader in our segment with an impeccable track record of delivery and results and we are focused on our organic growth and delivery to the lakhs of students that have trusted us,” an Aakash spokesperson said.

Valued at $3.44 billion, SoftBank-backed Unacademy is one of the largest edtech startups in India. The Bengaluru-headquartered startup has significantly cut its expenses as the startup pushes to become profitable in the coming quarters.

Unacademy “always raised more money than what was needed” to “continuously experiment and grow our platform without worrying about when we will run out of money,” Unacademy co-founder and chief executive Gaurav Munjal told employees last year. “But now we must change our ways. […] Winter is here.”

Byju’s, which is India’s most valuable startup, instead is in advanced discussions with bankers including Citi and Goldman Sachs to go ahead with the IPO of Aakash, according to a source familiar with the matter and presentations made by banks and viewed by TechCrunch.

Byju’s has received the approval from its board of directors to go ahead with the IPO of Aakash, which it acquired for nearly $1 billion last year, and it’s gearing up to file the paperworks, the source said, requesting anonymity as the matter is private.

“Aakash has strong financial growth and margin profile that is at the top of the range compared to India consumer and tech IPOs in the last 2 years,” Goldman Sachs bankers wrote in their presentation.

“We believe a fully distributed IPO valuation of $3.2 – 3.5bn is achievable for Aakash Byju’s,” Citi bankers wrote in their presentation.