Indian edtech company Vedantu has acquired a majority stake in the Deeksha education chain for $40 million, the latest in a growing effort by local online learning platforms to tap into opportunities in the offline market.
Vedantu has its headquarters in Bengaluru, where blast year defeated a unicorn, said it will integrate its technology into Deeksha’s offline hubs as part of a strategic partnership to create a “scalable hybrid model”. Deeksha is a 22 year old academy that runs 39 fitness centers in three states of India.
Vedantu started testing offline experiences earlier this year and says in Deeksha it has found the right partner to create roads that penetrate deeper into India’s smaller cities and towns. . In an interview with TechCrunch, Vedantu co-founder and CEO Vamsi Krishna said he’s been following Deeksha for 10 years, and as they begin to explore synergies together, it’s clear the two will be invaluable. mutually benefit from the partnership.
Deeksha’s current top revenue is between $10 and $12 million, and it’s operating at an EBIDTA margin of 21%, according to a person familiar with the matter. Krishna declined to comment on Deeksha’s finances.
Krishna, himself a teacher, took a slightly different approach to acquisition opportunities. The edtech market in India has seen more than a dozen companies merge in the past two years, but Vedantu has largely avoided getting into that game. “We are still open to acquiring more startups, but I don’t have a metric to hit. Acquiring companies is not a Vedantu strategy,” he said.
“When we say we are using a hybrid strategy, we do not mean pure offline hubs. In fact, we have no intention of opening a purely offline hub. We have always believed in providing access to quality teachers, especially in high school and high school cities. Our vision is that students come to the center, but teachers still teach. through streaming and other technologies.
India’s edtech giants have sped up their growth during the pandemic – and raised record amounts of capital. But as schools reopen, companies are finding it increasingly difficult to maintain the same growth rates.
India is one of the largest education markets in the world with more than 300 million students attending school and those preparing for competitive university exams. Only a small portion of this institution is currently using any online education services.
In contrast, offline coaching centers are growing and continue to be much more popular with students. Over the past two years, leading edtech giants including Byju’s, Vedantu and Unacademy, some of which have sought to replace offline players by providing affordable and high-quality education, have renewed their efforts. their efforts to exploit more directly the offline market.
Byju’s Acquisition of Aakash, another physics online institute, with nearly $1 billion last year. Unacademy launched offline experience stores earlier this year. “Offline learning is not going away anytime soon. In fact, online complements offline very well, and together as a package, the omnichannel model will drive and last a long time,” said GV Ravishankar, a partner at Sequoia India, said at an event earlier this year.
“Through this partnership, we will leverage Vedantu’s LIVE Class platform for our students and provide a hybrid solution that maximizes learning outcomes through personalized learning algorithms. impersonal. Vedantu’s blended learning model will also allow us to provide the same ‘Deeksha Experience’ to millions of students in smaller towns and cities at a reasonable cost,” said Dr. Deeksha, said in a statement.
