Multiple deals have been reported in the sector in the past six to eight months, including Google-backed edtech startup Adda247 acquiring test prep firm Ekagrata Eduserv, Allen Career Institute buying Peak XV-backed Doubtnut and mid-tier IT services firm Happiest Minds acquiring Macmillan Learning India.
Besides, SoftBank-backed Unacademy is in talks with K12 Techno Services for a merger, according to people in the know.
Genius Teacher, which has raised nearly $3 million since its inception, was acquired in an all-stock deal at an undisclosed valuation.
The startup is a quiz-based e-learning platform focused on the K-12 category.
With this acquisition, Schoolnet gets Genius Teacher’s private school market presence and innovative AI-led teacher and student apps, along with seeking to expand its reach to more than 10,000 private schools by 2026-27.
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“We had offers from institutional investors for funding but felt there could be a bigger game to be played by joining forces with Schoolnet,” said Sharma, who will become the chief growth officer at Schoolnet following the acquisition.Genius Teacher’s other cofounders – Shashank Pachore and Ruturaj Atre – along with a team of 20 employees will also join Schoolnet.
“One of the toughest problems in education is to crack distribution. There are multiple companies and products… I think over the last two decades, Schoolnet has cracked distribution. When we combine the power of our AI-led product and Schoolnet’s distribution across the pyramid of the school market, there’s a winning formula for success,” Sharma said.
In a statement, Schoolnet said it reported revenue of Rs 429 crore for 2023-24, with earnings before interest, taxes, depreciation and amortisation of Rs 69 crore. The revenue grew 20% year-on-year.
Schoolnet CEO RCM Reddy told ET that the company expects to increase its revenue to Rs 550 crore in this financial year.
“Today, a majority of our revenue comes from digitisation of government schools. Either the state and central government pays for it through one of their schemes or corporates through their CSR (corporate social responsibility) funds,” Reddy said. “Going forward, three years down the line, we expect revenue from government sponsors to be less than 50% with the majority coming from private schools. Therefore, private schools are going to play an important role.”
Other edtech firms that operate in the K-12 segment, working with schools, include GSV Ventures-backed Lead and Blume Ventures-backed Uolo.
Last year, edtech unicorn Lead had acquired the K-12 India business of British educational services company Pearson, which has been divesting its K-12 businesses in other markets as well.
In an interview to ET in February, edtech investor GSV Ventures’ managing partner Deborah Quazzo had said that consolidation would happen even as it hadn’t picked up as much pace as expected owing to the downturn faced by companies in the sector.
“If you are giving equity (against an acquisition), you have to convince the seller that it’s worth something… and cash is precious. In general, you are in this disequilibrium. Obviously, Byju’s was a dominant buyer… and they are not in the market at this point so that’s taken one force out. But it will (consolidation) happen. It makes a lot of sense,” she had said.
Byju’s, which is now facing legal pushback from its investors and creditors, had spent about $2.5 billion in 2021 alone to acquire several firms to strengthen its presence across education and reskilling.