In this photo taken on January 10, 2019, Byju Raveendran, founder of Byju's, the Bangalore-based educational technology start-up, poses at the company's premises in Bangalore. Photo: AFP / Manjunath Kiran

Indian online learning giant Byju’s is looking to further consolidate its leadership position in the education space and accelerate its offline growth.

The country’s most expensively valued education technology startup has closed the deal to acquire exam preparation firm Aakash Educational Services Limited for nearly $1 billion, multiple media outlets report.

Aakash is backed by private equity firm Blackstone and owns more than 200 physical tutoring outlets across the country that cater to students preparing to qualify for top engineering and medical colleges. It has been in the market for over 33 years and serves over 250,000 high-school students.

Regarding the acquisition, Byju’s founder, CEO Byju Raveendran, said, “Our complementary strengths will enable us to build capabilities, create engaging and personalized learning programs. The future of learning is hybrid and this union will bring together the best of offline and online learning, as we combine our expertise to create impactful experiences for students.”

Aakash Managing Director and co-promoter Aakash Chaudhry said, “Students who have wanted to access physical classrooms have gotten that from us. And those who wanted to access content and learning online have been served by Byju’s. Together, we will leverage the physical location and technology and online learning.”

He also pointed out that the leadership at Aakash Educational will stay with the firm after the acquisition.

After the transaction, Aakash founders and Blackstone Group will hold a minority stake in Byju’s. Ernst & Young was the exclusive financial advisor for Byju’s on this transaction, while Phoenix Advisors was the exclusive advisor for Aakash.

For Byju’s this is the second large acquisition within a year. In August last year, it had acquired WhiteHat Jr, an online coding school for young children, for $300 million.

Launched in 2015, Byju’s is currently valued at US$ 13 billion. It is a market leader in offering personalized learning programs for school students in India.

With over 80 million students cumulatively learning from the app, 5.5 million annual paid subscriptions, and an annual renewal rate of 86%, the app creates personalized learning programs for individual students based on their proficiency levels and capabilities which help them learn at their own pace and style. In just six months during the lockdown, Byju’s has added 45 million new students to its platform.

Byju’s last week raised $460 million at a valuation of $13 billion. In the calendar year 2020, it had raised more than $1.25 billion and prominent investors include Mary Meeker and Yuri Milner. The e-learning unicorn has so far raised over $2.3 billion from investors in 18 funding rounds.

India’s online education sector has seen an investment of $2.1 billion in the calendar year 2020, compared with $1.7 billion in the entire previous decade, according to a report by research firm Anand Rathi Advisors. It has projected that by 2025, the online education sector is poised to reach $12 billion.