Edtech startup Vedantu announced it has acquired a majority stake in Deeksha, a test preparation platform in Karnataka for board and competitive exam coaching for $40 million.
This will be the first acquisition for the edtech unicorn in 2022 which was earlier in the news for laying off more than 700 employees in three phases.
This partnership seeks to leverage Vedantu’s technology and integrate it into offline centers to create a scalable hybrid model which provides access to quality teaching even in remote Tier III and Tier IV towns at affordable cost, the company said in a press release. Over the past 23 years, Deeksha has created over 65,000 successful students through its 39 centers present across 3 states.
With this, Vedantu has joined its peers, Byju’s and PhysicsWallah that forayed into offline learning with tuition centers in some cities in June this year. As schools and offline institutions opened up in the post pandemic era, edtech companies have been experiencing a slowdown in growth. As a result, now they are prioritizing offline channels for further growth.
The initiative will further support Deeksha’s pioneered learning model that specializes in competitive exam prep in sync with board exam prep through collaboration with schools and colleges. With this strategic investment, Deeksha will bring in close to 13K of its students to Vedantu’s platform.
This year has turned out to be the worst for edtech companies that had emerged as investors’ darling in 2021. Besides Vedantu, Byju’s recently announced that it is laying off 2,500 employees. Unacademy, LEAD, and Eruditus, among others, also fired employees in large numbers while Lido, Udayy, SuperLearn and Crejo.Fun shut their operations permanently.
Despite the funding crunch, mergers and acquisitions in edtech have been going on. upGrad acquired seven startups this year followed by PhyiscsWallah’s three acquisitions whereas Unacademy acquired Gate Academy for an undisclosed sum.
Before this, Vedantu had acquired Pedagogy and Instasolv in 2021 during which the Tiger Global-backed company also gained unicorn status after $100 million in Series E round.