Blackstone Inc. and other shareholders of the test-preparation provider Aakash Educational Services This week the payment was to be made partly in cash and partly in Byju’s stock, but Byju’s sought an extension of two months, said the people, who asked not to be identified, while discussing a private matter. Some vendors received partial payments in 2021, the people said. One of the people said that Blackstone, which owns 38 per cent of Akash, opted to defer the payment till this year.
A Byju’s spokeswoman said the acquisition process is on track and all payments are expected to be completed by the due date i.e. August 2022. Blackstone did not respond to an email seeking comment and a representative for Aakash declined to comment. MorningContext previously reported that payment for the deal had been postponed.
Backed by Tiger Global Management and Mark Zuckerberg’s Chan Zuckerberg Initiative, Byju’s, one of the world’s most valuable startups, has expanded its business globally through acquisitions. But the tech investment environment has changed radically in recent months as company valuations have plummeted, and the number of startup deals and total funding fell to their lowest levels since late 2020.
Byju’s asked one of the people to push back the payment for the Aakash deal till the end of August as regulators have not yet approved the acquisition, adding that it has nothing to do with the cash crunch, one of the people said. . Blackstone and other Aakash shareholders agreed to the expansion, the person said.
Even in the midst of a constrained financial environment, Byju’s has sought to continue expanding. In May, people familiar with the matter said the company was in discussions to achieve the US target and was likely to bid for Chegg Inc. or 2U Inc. It has previously signed deals to acquire companies in India, the US and Austria.
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People familiar earlier this year said Byju’s was in talks with at least three special purpose acquisition companies and was aiming to unveil plans to go public through a merger with one of them.
The education pioneer is India’s most valuable startup with a valuation of $22 billion, according to market researcher CB Insights. Its backers also include Silver Lake Management, Naspers Ltd. and Mary Meeker’s Bond Capital. The edtech provider has approximately 115 million students using its online learning platform, of whom 7 million pay an annual subscription.