SUMMARY
The payment was part of the $950-Mn deal to acquire offline test prep giant Aakash
Blackstone is awaiting NCLT’s approval for the deal, post which it will receive as much as 1% equity in BYJU’S
Aakash was acquired by BYJU’S in April last year. The deal is currently awaiting regulatory approvals
Indian edtech giant BYJU’S has reportedly cleared the dues of private equity (PE) firm Blackstone and paid $234 Mn (INR 1,901.4 Cr) which it owed as part of its $950-Mn acquisition deal of offline test prep giant Aakash Educational Services Limited (AESL).
In its financial performance report for 2020-21 (FY21), released earlier this month, the edtech startup said that it would clear payments for the Aakash deal on September 23.
According to a Reuters report, BYJU’S has cleared all dues to Blackstone, which gives the PE firm an exit of around $400 Mn from AESL. Blackstone was the largest stakeholder in AESL, having invested $500 Mn in the offline test prep major for a 37.5% stake.
BYJU’S acquired AESL in April last year. The deal is awaiting regulatory approvals. Blackstone is also awaiting approval from the National Company Law Tribunal (NCLT) for the deal. Post the approval, it will receive as much as 1% equity in BYJU’S.
Earlier, media reports said that the edtech major missed its deadline for payment to the PE firm. BYJU’S had deferred the payment to Blackstone at least two times in the past.
The edtech major has been under the spotlight over the last few months for the delay in filing its financial statements for FY21. Finally, earlier this month, it reported a widening of its loss 19.8X year-on-year (YoY) to INR 4,588 Cr during the year.
Its revenue from operations grew marginally to INR 2,280 Cr during the year from INR 2,188.9 Cr in FY20.
The huge loss prompted debates across the industry, ranging from its accounting practices to the sustainability of its business model. The new accounting practice, implemented by the company’s auditors, saw around 40% of the revenue collected in FY21 get deferred.
Complicating matters further, around $250 Mn promised by Sumeru Ventures and Oxshott Capital Partners has been delayed because of ‘macroeconomic reasons’.
Amid the ongoing funding winter, the waning impact of the pandemic and the reopening of schools and offline coachings, the edtech space in the country is standing at a crossroads. While the likes of BYJU’S and Unacademy have expanded to offline centres, many edtech startups have shut shop.
Four edtech startups have already shut down this year and the sector also accounts for the most layoffs that Indian startups have conducted this year. According to Inc42’s ‘Indian Startup Layoff Tracker’, 13 edtech startups, including three of the seven edtech unicorns, have laid off 4,268 employees so far in 2022.
