Byju's Billion Dollar Sale 🏢

Hey there,

Byju's acquired Aakash for $1 billion. Now, they're thinking of selling it. But why? 🤔

Byju's, India’s most valued startup valued at $22 billion, made a bold move in 2021 by acquiring Aakash, a leader in offline test prep. It seemed like a strategic masterstroke, blending the best of offline and online education.

Now, Byju's is thinking of selling Aakash, and here's why:

1. Financial Hurdles:
   
   Byju's is under financial pressure, with quarterly interest payments of about $40 million looming. A missed payment could lead to a default on
   their $1.2 billion loan.
   

2. Restructuring Plan: 
   
   Under the new CEO, Arjun Mohan, Byju's is undergoing a massive overhaul. This includes potential mergers of business units and a significant job cut of around 4,500 positions, all in the name of cost efficiency.
   

3. Debt Repayment Strategy: 
   
   The sale of Aakash appears to be a strategic move to repay debts and solidify Byju's financial standing. They're also in discussions with major private equity firms like KKR & Bain Capital.
   

4. Changing Edtech Landscape: 
   
   The edtech boom post-pandemic is slowing down. With competitors like Unacademy slashing their marketing budgets by up to 99%, Byju's might need to adapt and rethink their strategies.

Byju's journey from acquiring Aakash to potentially selling it highlights the unpredictable nature of the tech sector. These moves, while surprising to some, could be strategic steps towards ensuring long-term stability.

In this ever-changing tech world, can these changes pave the way for a brighter future for Byju? Only time will tell

✍️ Jargon of the day

Liquidity: This refers to how quickly an asset can be converted into cash without affecting its market price.

In Byju's case, selling Aakash could be a move to increase liquidity and ensure they have enough cash on hand to meet their financial obligations, including the hefty interest payments on their loan.

Loved this edition? Or have some thoughts to share? We'd love to hear from you

Cheers,
Hrishikesh