BYJU’S -owned Aakash Educational Services Ltd hopes to add 40-50 new centers annually to meet demand in the next 2-3 years, Abhishek Maheshwari, CEO, Aakash Educational Services Limited, told businessline.

Almost 50 per cent of new centres will come up in Tier-2,-3, and -4 cities, where the company sees a high level of aspiration. The other half will be set up in existing cities. The company has about 300 centres. 

Talking about Aakash’s growth in the past two years, Maheshwari said the business grew almost 2.5x in the last two years both in terms of revenue and scale in terms of the number of students, etc. “In 2021, our active student count in offline business was around 1.6 lakh and in online business, we had a base of about 10,000 to 15,000 students. This year, we have enrolled around 3,60,000- 3,70,000 students in our offline centers, and around 1 lakh students have joined us online. Similarly, we were about 4,000 people team in 2021, and today we are more than 10,000 people. From 1,800-1,900 teachers in 2021, we are now close to 5,000 teachers,” he added. 

The jump in the number of team members is reflective of Aakash’s move away from the franchisee model. The additional 125 or so centers that Aakash has opened in the last 18 months are its own centers. “Originally we started with franchisee centers because there were capital constraints, but at this point, we have enough cash flow to be able to fund our own expansion. Also, the intensity and the pace at which we are operating now. I think it will be harder for new franchisees to come in. We have some existing ones who are doing very well and have grown with us. But for new franchisees, I imagine that it will be relatively hard,” said Maheshwari. 

On the growing competition in the test prep space, with many online players like PhysicsWallah, Unacademy, and Vedantu moving to an offline learning model, he said, “a lot of money has come into the core test prep business. This kind of money has never come into this space ever before. A lot of these people had raised money on different promises around online etc and are now investing that offline.  So I would say there is some level of irrationality in the market - overpaying for teachers or overpaying for spaces.”

Offline model

He added that the offline test prep model is profitable, if the company focuses on the right things, and runs it well because it’s not hard to lose money in this business. “I’m sure some of them will succeed but it’s very early days to make any judgment. Just because someone has got an ‘n’ number of students, or opened an ‘x’ number of centers - doesn’t really mean much at this point in time. Ultimately, they have to go through the entire student journey, deliver outcomes and then do it over and over again. Now we have a track record of doing that for now almost 34 years. So it is futile to try and compare us with what is happening with the newer players,”said Maheshwari.

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