Startup Street: Byju’s-Whitehat Deal Caps Buzzing Week For Indian Edtech
This week on Startup Street, we take a look at the series of developments that have happened in Indian edtech, making it one of the most-watched sector in the startup space. Venture capital firm Sequoia has doubled down on its India ambitions by boosting domestic leadership. And InCred is in talks with a prominent private equity firm to sell stake. Here’s what went on...
Indian Edtech’s Coming Of Age
India’s education technology space continued to be a hotpot of action with more funding, consolidation in the sector and new launches.
The big highlight was Byju’s $300-million acquisition of smaller edtech peer WhiteHat Jr. The Mumbai-based startup, less than 20 months old, will allow Byju's to launch coding—a fast-growing segment among school children—on its platform.
The deal also marks the beginning of consolidation in India’s edtech space, in a year when investors have finally warmed up to the prospects of online learning in India. This has been accelerated further by the Covid-19 pandemic which has forced students to stay at home, and for institutions to explore online models of teaching.
That is visible in the kind of funding the space has received. At a time when 40% of Indian startups are struggling to keep operations running, edtech startups have become flushed with funds. Venture capital firms had invested almost $1 billion in edtech firms till July this year—over double of what the sector in all of 2019. It is also the highest funded sector so far this year, according to data provided by Venture Intelligence.
The edtech unicorn will now eye further acquisitions and even an initial public offer to list on the bourses. It is already reported to be in talks to acquire Gurugram-based platform Doubtnut.
But Byju’s wasn’t the only one to grab headlines. Online learning startup Springboard raised $31 million in a Series B funding round led by Telstra Ventures. The startup, which had started offering its services in India in 2019, said it has seen a 330% increase in student enrolment in the last one year.
And just a few days before that, Toppr raised around $47 million led by Dubai's Foundation Holdings. The startup will use the funding to develop it’s own operating system to run “in-school” and “after-school” learning programs. It has already tied up with Ryan International Group of Schools across the country for using its operating system.
There was no shortage of new launches either. Earlier this week, Gurugram-based PlanetSpark launched live online training for teachers to guide them through newer online teach methods and best practices. The training program will involve 1 hour classes for 3 days a week, at the end of which tutors will receive a certification.
Simplilearn tied up with the National Skill Development Corporation to upskill working professionals in digital technologies. The startup will make over 1,000 hours of digital skill resources for free to prepare workforces for upcoming changes in technologies.
Sequoia Beefs Up India Team
Venture capital firm Sequoia Capital has made three key appointments to its India team, roping in a new Chief Marketing Officer, Operating Partner and creating a role of public policy head.
The firm, which had recently announced an investment of $1.35 billion to fund startups in India and South East Asia, has roped in former Salesforce executive Shweta Rajpal Kohli to head the newly-created role of public policy head.
It has also appointed Gayatri Vasudeva Yadav as Chief Marketing Officer and Ajey Gore as Operating Partner, Technology.
Yadav joins Sequoia as Chief Marketing Officer from Star India. Based in Bengaluru, she will also work closely with portfolio CMOs to help them launch and grow brands in addition to her role as CMO for Sequoia Capital India.
Gore, who served most recently as the Group CTO of Gojek, is joining the company as Operating Partner, Technology, and will be based in Singapore.
Explaining the need for creating new public policy role, Sequoia Capital Managing Director Shailendra Singh said: “Technology has become so mainstream and its impact on society so significant that regulators across the world have stepped up their dialogue and collaboration with tech startups to create an enabling environment”.
Kohli “will work with industry bodies and associations, and will facilitate dialogue and collaboration between our startups and governments in India and SEA to enable progressive policy frameworks to strengthen our startup ecosystem,” he said in a blogpost.
KKR Set To Buy Stake In Fintech Startup InCred
Private equity firm KKR is all set to buy stake in fintech startup firm Incred Finance, according to people familiar with the discussions.
KKR and InCred have signed an exclusivity agreement under, which the private equity firm plans to merge its retail NBFC arm with Incred.
“We understand that the equity injection will take the form of a merger of KKR's wholesale NBFC with InCred's Retail franchise. The aim appears to create a strongly tech focused Indian financial services behemoth,” a source privy to the development told PTI.
KKR and its limited partners will pick up a large minority interest in InCred, the source added.
The combined entity will operate under the InCred brand name, and post the deal, the merged book size will be around Rs 6,000 crore with a relatively low debt equity ratio.
The four-year-old startup, founded by former Deutsche banker Bhupinder Singh, has raised over Rs 1,000 crore till date from a set of investors, including Investcorp, Manipal chief Ranjan Pai, Dutch government-owned FMO, Moore Venture Partners, Paragon, Elevar and OAKS Asset Management amongst others.
“With its investment in InCred, KKR is doubling down on its bet in Indian Financial Services, attracted by the vast potential offered by the country's underserved consumers and small businesses,” the source noted.