A Strategic Partnership to Create a Scalable Hybrid Model
Indian edtech company Vedantu has acquired a majority stake in education chain Deeksha for $40 million, marking the latest move by local online learning platforms to tap opportunities in the offline market. The Bengaluru-headquartered Vedantu, which became a unicorn last year, will integrate its technology into offline centers of Deeksha as part of the strategic partnership.
About Deeksha
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. The company’s current topline revenue is between $10 million to $12 million, and it operates at a 21% EBIDTA margin.
Vedantu’s Hybrid Strategy
Vedantu co-founder and chief executive Vamsi Krishna said the company has been tracking Deeksha for 10 years and saw an opportunity to create a scalable hybrid model. "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," he said.
Why Offline Learning Remains Important
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, making offline coaching centers a popular choice among students.
Top Edtech Giants Renew Efforts to Tap Offline Market
Top edtech giants including Byju’s, Vedantu, and Unacademy have renewed their efforts to more directly tap the offline market. For instance, Byju’s acquired Aakash, another physical online institute, for nearly $1 billion last year. Unacademy launched offline experience stores earlier this year.
GV Ravishankar on Omnichannel Model
"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," said GV Ravishankar, a partner at Sequoia India.
Deeksha’s Partnership with Vedantu
Through this partnership, Deeksha will leverage Vedantu’s LIVE Class platform for its 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.
Impact on Edtech Market
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 stake or a certain goal to acquire," said Krishna.
Conclusion
The acquisition marks another significant move by Vedantu to expand its reach and create a scalable hybrid model. With the edtech market in India expected to continue growing, this partnership is likely to have a significant impact on the industry as a whole.
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