Talks with Byju's on, but could take several weeks: Aakash Educational MD

Talks for a partnership with Indian unicorn Byju's reflect several prescient moves by this second-generation promoter

Circa 1988. Aakash Institute, a tiny private coaching outfit is launched out of a room in Ganesh Nagar, West Delhi. Cut to 2019. Private equity firm Blackstone picks up 37.5 per cent stake in the same company, valuing it at around $500 million. Today, as Aakash Educational Services Limited (AESL), the well-known test preparatory services institution, holds talks for building a strong partnership with Bengaluru-based unicorn Byju’s, at an estimated $1 billion, this could be one of the world’s biggest edtech deals. 

If the man at the helm, Aakash Chaudhry (his father J C Chaudhry founded and named the original institute after him and the moniker stuck), is on tenterhooks, it certainly does not show. “We’re on an exciting journey right now,” he says. “Our pedagogy has translated well into the virtual space and students have accepted the transition well.” In 2020, 1,583 students from Aakash Institutes across India qualified for the engineering entrance exam, JEE Advanced, and 140 featured in the top 500; and 82,000 Aakash tutees qualified for the medical entrance examination, NEET, and bagged all three top positions in the exam. 

Over the years, AESL has evolved a centralised curriculum, content development and faculty training team to ensure that all its centres, some franchised, offer a certain standard of teaching — what Chaudhry, 41, refers to as the “core” of the company’s philosophy. Though student reviews online attest that the teaching quality across their centres is often patchy, it’s a problem most franchisee businesses face. Meanwhile, students continue to sign up, a sign that the father-son duo’s formula has served them well. 

Industry observers comment that the growth trajectory of AESL mirrors Chaudhry’s. After an executive MBA from Harvard, Chaudhry worked in Infosys Technologies and Cognizant Technology Solutions before joining the family business in 2006. At that time, his father was teaching as well as trying to manage the 25-odd brick-and-mortar centres he had expanded across India. The business used to be, as he calls it, purely “chalk and talk”. With his techie background (he has an engineering degree as well and professional experience), Chaudhry was, from the very start, bullish about edtech. By 2014, AESL had developed several online modes of learning, ranging from video lectures to internet-based classrooms. He also opened new centres in tier two and three cities and towns all over the country. The growth in AESL’s revenues has been exponential since, underscoring India’s vast market for private coaching and competitive examination preparation. Blackstone picked up a 37.5 per cent stake in AESL in 2019 when the company was valued at $500 million. Today, AESL has 214 centres, 2,50,000 students and its valuation has doubled. 

When AESL acquired MeritNation in January 2020 for Rs 100 crore, many saw the move as prescient: Merely two months later, the Covid-19 pandemic threw a curveball no one could have anticipated. “The pandemic was a game-changer,” Chaudhry says. Overnight, their 214 centres had to convert to online teaching. His bullishness on edtech paid off; the company already had the infrastructure in place to make the transition. And MeritNation, an online tutoring platform, proved to be a huge asset. 

Unsurprisingly, much of AESL’s investment lately has been on developing their technological capabilities, including content recording studios and hiring teachers especially trained to deliver digital content. In December 2020, AESL launched yet another concept — a satellite-enabled classroom in Nuh district, Haryana. The idea was to give students who may not have access to a good internet network, the opportunity to get a classroom-style education with a virtual teacher. With plans to open more such centres in remote areas across India in the coming months, AESL seems poised at the base of a steep growth curve fuelled by the shift towards virtual education hastened by the Covid-19 pandemic and lockdown. “We’re expecting our virtual platforms to account for at least 30 per cent of our total revenues in the coming years,” he says. 

Meanwhile, negotiations with Byju’s are on, but could take several weeks. “Whatever the outcome, one thing is clear,” Chaudhry says. “We will continue to run this business with the same passion and commitment for no one knows it better than us!”