Byju’s, the most valued startup in India and a provider of online education, is delaying payments for a $1 billion acquisition made last year.
According to the sources, who declined to be named because the conversations were private, Byju’s requested a two-month delay before paying Blackstone Inc. and other shareholders of test prep company Aakash Educational Services this week. According to the sources, several dealers got partial payments in 2021. According to one of the sources, Blackstone, which controlled 38% of Aakash, decided to postpone payments that were due this year.
According to a Byju’s spokesperson, the acquisition process is “completely on track” and all payments should be finished by the predetermined deadline of August 2022. An email requesting response from Blackstone went unanswered, and an Aakash representative declined to respond. The Morning Context had already reported a delay in the deal’s payments.
Byju’s, one of the world’s most valuable startups with backing from Tiger Global Management and Mark Zuckerberg’s Chan Zuckerberg Initiative, has expanded its business globally through acquisitions. But the tech investing climate has changed radically in recent months as company valuations have plummeted, and the number of startup deals and total funding raised dropping to its lowest level since late 2020.
Byju has requested to postpone the Aakash transaction payments until late August since authorities have not yet approved the acquisition. They said that this is unrelated to a financial issue. According to the source, the extension was approved by Blackstone and Aakash’s other shareholders.
Byju’s has attempted to continue growing despite a limited finance climate. People with knowledge of the situation indicated in May that the business was in talks to purchase a US target and was expected to make an offer for either Chegg Inc. or 2U Inc. It has previously closed transactions to buy businesses in Austria, the US, and India.
Byju’s was also in talks with at least three special-purpose acquisition companies and was aiming to unveil plans to go public via a merger with one of them, people familiar said earlier this year.
The education pioneer is India’s most valuable startup, with a valuation of $22 billion, according to the market researcher CB Insights. Its backers also include Silver Lake Management, Naspers Ltd., and Mary Meeker’s Bond Capital. The edtech provider has about 115 million students using its online learning platform, with 7 million of them paying annual subscriptions.
