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    Blackstone picks up controlling stake in edtech startup Simplilearn

    Synopsis

    Blackstone’s acquisition of Simplilearn comes months after the Byju’s-Aakash deal, wherein the private equity major exited the offline tutor in a $950-million transaction.

    BlackstoneReuters
    Blackstone has agreed to acquire a controlling stake in edtech startup Simplilearn and will invest $250 million in the company as part of the deal.
    Bengaluru: Private equity major Blackstone Group has entered into a definitive agreement to acquire a controlling stake in edtech startup Simplilearn for $250 million (about Rs 1,870 crore).

    This comes just a few months after the fund sold its portfolio company Aakash Educational Services, which runs tutorial centres across the country, to edtech startup Byju’s in a cash-and-stock deal estimated at $950 million.

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    Early investors Kalaari Capital, Helion Venture Partners and Mayfield Fund are making an exit as part of the transaction. Founder and chief executive Krishna Kumar will stay on to run the operations.

    “My team and I have partnered with Blackstone to build the largest digital skilling company in the world,” Kumar said.

    Simplilearn has so far raised $28 million from Kalaari Capital, Helion Venture Partners and Mayfield Fund, which together hold more than half the stake in the company. They are exiting with a return of 6-15 times their investment, The Times of India reported, citing sources it did not name.

    The company provides online training across technologies and applications in data science, artificial intelligence and machine learning, cloud computing and other digital disciplines. As much as 60% of its business comes from overseas markets.

    “We believe Blackstone can add significant value to our company because of their scale, commitment to building businesses and global network. This will enable us to develop partnerships with businesses and universities as Simplilearn continues to expand around the world,” Kumar said.

    “This is Blackstone’s first private equity investment in Asia in a consumer technology company. Like many other sectors, technology is disrupting education and education technology has been a high conviction theme for Blackstone in India and globally,” said Amit Dixit, Head of Asia for Blackstone Private Equity.

    Simplilearn claims to have brought on board more than 2 million learners on the platform. It hopes to increase this to 5 million learners by 2023.

    There has been a rush of mergers and acquisitions (M&As) in the online education sector amid the Covid-led lockdown of physical schools and test preparation centres. Last week, edtech startup Vedantu said it acquired a majority stake in AI-enabled personalised learning platform Pedagogy. It did not disclose the financial terms.
    The Economic Times

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