Startups

Vedantu acquires majority stake in Deeksha for $40 million in offline push

Comment

Vedantu building in India
Image Credits: TechCrunch

Indian edtech Vedantu has acquired a majority stake in education chain Deeksha for $40 million, the latest in local online learning platforms’ growing attempts at tapping opportunities in the offline market.

The Bengaluru-headquartered Vedantu, which became a unicorn last year, said it will integrate its technology into offline centers of Deeksha as part of the strategic partnership to create a “scalable hybrid model.” Deeksha is a 22-year-old institution that operates 39 physical centers in three Indian states and coaches students in 11th and 12th grade to prepare for competitive exams.

Vedantu began experimenting with offline experience earlier this year and said in Deeksha it found the right partner to maker deeper inroads in smaller Indian cities and towns. In an interview with TechCrunch, Vedantu co-founder and chief executive Vamsi Krishna said he has been tracking Deeksha for 10 years and when they began exploring synergies together, it became clear that the two will immensely benefit from the partnership.

Deeksha’s current topline revenue is between $10 million to $12 million and it’s operating at a 21% EBIDTA margin, according to a person familiar with the matter. Krishna declined to comment on Deeksha’s finances.

Krishna, who is a teacher himself, has taken a slightly different approach to acquisition opportunities. The edtech market in India has witnessed more than a dozen consolidations in the past two years, but Vedantu has largely avoided any participation in that game. “We are still open to acquiring more startups, but I don’t have a certain metric to hit. Acquiring firms is not a strategy for Vedantu,” he said.

“When we say we are employing a hybrid strategy, we don’t mean pure offline centers. In fact, we don’t have any intention to ever open a pure offline center. We have always believed in creating access to quality teachers especially in tier 3 and tier 4 cities. Our vision is that students come to the center, but teachers are still teaching through streaming and other technologies.

Indian edtech giants accelerated their growth during the pandemic — and raised record amounts of capital. But as schools reopen, the firms are increasingly finding it difficult to maintain the same growth.

India is one of the world’s largest education markets with over 300 million school-going students and those preparing for competitive college exams. Only a sliver of this base is currently using any online education service.

Offline coaching centers, in contrast, are growing and continue to remain far more popular among students. In the past two years, top edtech giants including Byju’s, Vedantu and Unacademy, some of which sought to displace the offline players by offering affordable and higher quality education, have renewed their efforts to more directly tap the offline market.

Byju’s acquired Aakash, another physical online institute, for 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 really well, and together as a package, the omnichannel model is going to steer and be here for a long period of time,” 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. Vedantu’s hybrid learning model will also enable us to provide the same ‘Deeksha Experience’ to millions of students in smaller towns and cities at an affordable cost,” said Dr. Sridhar, co-founder of Deeksha, in a statement.

More TechCrunch

Silo, a Bay Area food supply chain startup, has hit a rough patch. TechCrunch has learned that the company on Tuesday laid off roughly 30% of its staff, or north…

Food supply chain software maker Silo lays off ~30% of staff amid M&A discussions

Featured Article

Meta’s new AI council is composed entirely of white men

Meanwhile, women and people of color are disproportionately impacted by irresponsible AI.

8 hours ago
Meta’s new AI council is composed entirely of white men

If you’ve ever wanted to apply to Y Combinator, here’s some inside scoop on how the iconic accelerator goes about choosing companies.

Garry Tan has revealed his ‘secret sauce’ for getting into Y Combinator

Indian ride-hailing startup BluSmart has started operating in Dubai, TechCrunch has exclusively learned and confirmed with its executive. The move to Dubai, which has been rumored for months, could help…

India’s BluSmart is testing its ride-hailing service in Dubai

Under the envisioned framework, both candidate and issue ads would be required to include an on-air and filed disclosure that AI-generated content was used.

FCC proposes all AI-generated content in political ads must be disclosed

Want to make a founder’s day, week, month, and possibly career? Refer them to Startup Battlefield 200 at Disrupt 2024! Applications close June 10 at 11:59 p.m. PT. TechCrunch’s Startup…

Refer a founder to Startup Battlefield 200 at Disrupt 2024

Social networking startup and X competitor Bluesky is officially launching DMs (direct messages), the company announced on Wednesday. Later, Bluesky plans to “fully support end-to-end encrypted messaging down the line,”…

Bluesky now has DMs

The perception in Silicon Valley is that every investor would love to be in business with Peter Thiel. But the venture capital fundraising environment has become so difficult that even…

Peter Thiel-founded Valar Ventures raised a $300 million fund, half the size of its last one

Featured Article

Spyware found on US hotel check-in computers

Several hotel check-in computers are running a remote access app, which is leaking screenshots of guest information to the internet.

11 hours ago
Spyware found on US hotel check-in computers

Gavet has had a rocky tenure at Techstars and her leadership was the subject of much controversy.

Techstars CEO Maëlle Gavet is out

The struggle isn’t universal, however.

Connected fitness is adrift post-pandemic

Featured Article

A comprehensive list of 2024 tech layoffs

The tech layoff wave is still going strong in 2024. Following significant workforce reductions in 2022 and 2023, this year has already seen 60,000 job cuts across 254 companies, according to independent layoffs tracker Layoffs.fyi. Companies like Tesla, Amazon, Google, TikTok, Snap and Microsoft have conducted sizable layoffs in the first months of 2024. Smaller-sized…

13 hours ago
A comprehensive list of 2024 tech layoffs

HoundDog actually looks at the code a developer is writing, using both traditional pattern matching and large language models to find potential issues.

HoundDog.ai helps developers prevent personal information from leaking

The changes are designed to enhance the consumer experience of using Google Pay and make it a more competitive option against other payment methods.

Google Pay will now display card perks, BNPL options and more

Few figures in the tech industry have earned the storied reputation of Vinod Khosla, founder and partner at Khosla Ventures. For over 40 years, he has been at the center…

Vinod Khosla is coming to Disrupt to discuss how AI might change the future

AI has already started replacing voice agents’ jobs. Now, companies are exploring ways to replace the existing computer-generated voice models with synthetic versions of human voices. Truecaller, the widely known…

Truecaller partners with Microsoft to let its AI respond to calls in your own voice

Meta is updating its Ray-Ban smart glasses with new hands-free functionality, the company announced on Wednesday. Most notably, users can now share an image from their smart glasses directly to…

Meta’s Ray-Ban smart glasses now let you share images directly to your Instagram Story

Spotify launched its own font, the company announced on Wednesday. The music streaming service hopes that its new typeface, “Spotify Mix,” will help Spotify distinguish its own unique visual identity. …

Why Spotify is launching its own font, Spotify Mix

In 2008, Marty Kagan, who’d previously worked at Cisco and Akamai, co-founded Cedexis, a (now-Cisco-owned) firm developing observability tech for content delivery networks. Fellow Cisco veteran Hasan Alayli joined Kagan…

Hydrolix seeks to make storing log data faster and cheaper

A dodgy email containing a link that looks “legit” but is actually malicious remains one of the most dangerous, yet successful, tricks in a cybercriminal’s handbook. Now, an AI startup…

Bolster, creator of the CheckPhish phishing tracker, raises $14M led by Microsoft’s M12

If you’ve been looking forward to seeing Boeing’s Starliner capsule carry two astronauts to the International Space Station for the first time, you’ll have to wait a bit longer. The…

Boeing, NASA indefinitely delay crewed Starliner launch

TikTok is the latest tech company to incorporate generative AI into its ads business, as the company announced on Tuesday that it’s launching a new “TikTok Symphony” AI suite for…

TikTok turns to generative AI to boost its ads business

Gone are the days when space and defense were considered fundamentally antithetical to venture investment. Now, the country’s largest venture capital firms are throwing larger portions of their money behind…

Space VC closes $20M Fund II to back frontier tech founders from day zero

These days every company is trying to figure out if their large language models are compliant with whichever rules they deem important, and with legal or regulatory requirements. If you’re…

Patronus AI is off to a magical start as LLM governance tool gains traction

Link-in-bio startup Linktree has crossed 50 million users and is rolling out the beta of its social commerce program.

Linktree surpasses 50M users, rolls out its social commerce program to more creators

For a $5.99 per month, immigrants have a bank account and debit card with fee-free international money transfers and discounted international calling.

Immigrant banking platform Majority secures $20M following 3x revenue growth

When developers have a particular job that AI can solve, it’s not typically as simple as just pointing an LLM at the data. There are other considerations such as cost,…

Unify helps developers find the best LLM for the job

Response time is Aerodome’s immediate value prop for potential clients.

Aerodome is sending drones to the scene of the crime

Granola takes a more collaborative approach to working with AI.

Granola debuts an AI notepad for meetings