Vedantu To Take Majority Stake In Deeksha For $40 Million

Deeksha will bring its 13,000 students to Vedantu's platform and leverage the latter's existing technology and pedagogic content.

<div class="paragraphs"><p>(Source:&nbsp;<a href=";utm_medium=referral&amp;utm_content=creditCopyText">Vardan Papikyan</a> on <a href=";utm_medium=referral&amp;utm_content=creditCopyText">Unsplash</a>)</p></div>
(Source: Vardan Papikyan on Unsplash)

Edtech firm Vedantu has acquired a majority stake in test preparation platform Ace Creative Learning, which operates under the Deeksha brand, for $40 million (about Rs 330 crore), the company said on Thursday.

Vendantu CEO and co-founder Vamsi Krishna told PTI that the acquisition will help the company expand its hybrid business model with access to about 40 offline centres that the 24-year-old Deeksha operates in three states of Karnataka, Telangana and Andhra Pradesh.

"Vedantu opened its offline hybrid centre in Muzaffarpur early this year and we have been looking at doubling down and growing more on our hybrid strategy. The Deeksha team had been looking for technology integration and scaling up their courses. We are looking at combining Deeksha's offline centres and Vendantu's technology to scale many hybrid centres, especially in tier-3 and 4 locations," Krishna said.

He said that the strategic investment has been closed at a deal size of $40 million. Deeksha is expected to close the current fiscal year with revenue in the range of Rs 90-100 crore.

"Deeksha is a healthy company with a great topline and positive Ebitda margin. The acquisition will help improve our topline as well as bottomline," Krishna said.

With this strategic investment, Deeksha will bring in close to 13,000 of its students to Vedantu's platform. In addition, Deeksha will leverage Vedantu's already existing live classes, educational technology, and pedagogical content.

Krishna said that Deeksha, which has around 950 employees, will continue to operate as an independent entity and existing founders will run the operations.

"Our hybrid expansion should contribute around 15-20% to our overall topline. We will use our internal accruals for expansion," he said. Krishna said that Vedantu will continue to invest in the expansion of the hybrid centre and look for suitable acquisitions that come up before the company.