A US bankruptcy court has approved the sale of two platforms owned by Indian edtech company Byju’s, including coding platform Tynker and kids learning platform Epic, for amounts lower than their original acquisition costs.

This decision was made during a hearing on May 20, according to EdWeek Market Brief.

CodeHS, a computer science education firm, acquired Tynker for US$2.2 million in cash.

Byju’s had purchased Tynker in 2021 for US$200 million in a cash-and-stock deal. Epic, a children’s learning platform, was sold to China’s TAL Education Group for US$95 million.

Byju’s acquired Epic in 2022 for US$500 million in cash and stock. These sales follow financial difficulties for Byju’s.

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🔗 Source: The Economic Times

🧠 Food for thought

1️⃣ Edtech acquisitions facing severe value erosion across the industry

Byju’s sale of Tynker for US$2.2 million (after paying $200 million) and Epic for $95 million (after paying $500 million) highlights the significant challenges in edtech acquisitions.

This isn’t Byju’s first experience with dramatic value depreciation. In 2017, the company acquired TutorVista for less than $3 million after Pearson had previously purchased it for US$150 million 1.

The edtech sector as a whole has seen valuation corrections, with median revenue multiples stabilizing at just 1.6x in Q4 2024, following the inflation of valuations during the pandemic period 2.

This trend emphasizes the difficulties in accurately valuing educational technology assets, particularly when acquisitions are made during market peaks.

Industry data indicates that edtech valuations are often speculative, driven more by anticipated future growth than current earnings, leaving them vulnerable when market conditions shift 3.

2️⃣ Aggressive acquisition strategy backfiring across the edtech landscape

Byju’s rapid expansion through acquisitions—which initially propelled it to a $22 billion valuation and status as the world’s most valuable edtech company—has become a significant liability during its financial downturn 4.

The company’s acquisition spree included Epic ($500 million), Tynker ($200 million), and Osmo ($120 million)—all purchased during a period when edtech valuations were inflated by pandemic-driven demand 5.

These acquisitions contributed to over US$1 billion in unpaid debts that now plague the company, with court filings revealing allegations of financial mismanagement and improper fund transfers 6.

The bankruptcy sales reflect a broader industry trend. A 2024 report identified a 23% annualized increase in edtech M&A deals, with many transactions involving distressed assets being acquired at steep discounts 7.

This trend illustrates how rapid expansion through high-priced acquisitions can shift from a growth strategy to a financial burden when market conditions change, particularly in volatile sectors like educational technology.

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