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Unacademy and BYJU’S-owned Aakash are reportedly considering a possible merger. However, BYJU’S and Aakash have denied any such development.

According to a Moneycontrol report, the talks are still in the preliminary stages and a transaction may not go through. It has not yet progressed to the term sheet level, the report added.

If the purchase goes through, it will be a combination of cash and stock, and the combined entity will consider an IPO rather than Aakash acting alone to seek a public listing, the report noted.

YourStory could not independently verify the report.

The two edtech firms share a number of backers, including General Atlantic, Tiger Global, and Sequoia Capital. Since the combined entity could make a stronger case for a possible IPO, common investors in both firms were eager to see a merger through, as per the report.

BYJU’S Co-founder Byju Raveendran and Unacademy Founder Gaurav Munjal have been doing discussions during the past month, the report noted. If the deal goes through, Munjal is anticipated to lead the combined entity, but Byju may be given a board position, it added.

Unacademy last raised $440 million in August 2021 at a valuation of $3.4 billion. BYJU’S raised its last equity funding round of $250 million in October 2022 at a fixed $22 billion valuation.

A part of this merger deal, about $100 million, will be in cash, as per the report. The merger will help BYJU’S —which is struggling with the delay in its fundraising due to a delayed due diligence process—wave over a liquidity crunch.

Earlier this month, Bloomberg News reported that BYJU’S is planning to raise as much as $250 million through the issuance of convertible notes by Aakash.

According to the report, Aakash had sales of roughly Rs 1,400 crore in FY22 and is anticipated to surpass Rs 2,500 crore this year.

If the merger happens, Unacademy and Aakash will combine to form one of India’s largest tutoring organisations with a solid presence in the offline and online test preparation markets.

BYJU’S bought brick-and-mortar education player Aakash in a cash-and-stick deal worth about $950 million in 2021.