Blackstone acquires controlling stake in Simplilearn for $250 million

Debangana Ghosh Mumbai | Updated on July 20, 2021

This is its first private equity investment in Asia in a consumer technology company


Global private equity firm Blackstone on Monday announced that it is has entered into a definitive agreement to acquire over 60 per cent stake in edtech and digital skilling platform Simplilearn for $250 million.

The deal will see the exit of existing investors Kalaari Capital, Helion Venture Partners and Mayfield Fund. But the stake of Simplilearn’s management will remain intact, Simplilearn’s founder and CEO Krishna Kumar told BusinessLine

Amit Dixit, Head of Asia for Blackstone Private Equity, said, “This is Blackstone’s first private equity investment in Asia in a consumer technology company. Like many other sectors, technology is disrupting education and education technology has been a high conviction theme for Blackstone in India and globally. Simplilearn is a differentiated player in the digital skilling space with premium content created in partnership with marquee university and industry partners. We are excited to partner with Krishna Kumar and Simplilearn’s top-notch management team to accelerate growth and build the world’s pre-eminent digital learning company, and we expect this to be the first of many such investments in Asia.”

Kumar will be utilising the fresh capital in expanding Simplilearn’s presence in more markets while investing in technology and hiring. “We are looking to become the largest digital skilling company in the world. Beyond our core markets in India and the US we will now expand our presence in to other markets like Latin America and Europe. We will be increasing more university and industry partnerships. We will be investing in our technology and team. Blackstone has a global presence. They have worked with companies of our size and helped them grow 10X in three years. We too are looking at experiencing a similar journey and learn from it,” he told BusinessLine.

Founded in 2010, Kumar’s start-up has been profitable for the fourth year in a row. The platform offers over 100 programs to help early to mid-career professionals acquire new-age digital skills across Cloud, DevOps, Data Science, Artificial Intelligence & Machine Learning, Digital Marketing, Cyber Security and more. Simplilearn offers programs in partnership with top global and Indian universities, and enterprises to enable learners and professionals to develop digital skills and help businesses upskill their workforce.

The platform currently has 2 million paid users and has been adding 70,000 free users and 20,000 paid user every month. By 2023, Kumar estimated that the number of free users alone will go up to 5 million plus. “With initiatives like government now allowing degree programmes online, it has expanded the market opportunity significantly,” he said.

Simplilearn has tied-up with well-known educational institutes such as Caltech CTME, MIT Schwarzman College of Computing, UMass Amherst and the Isenberg School of Management, Purdue Online, Jagdish Sheth School of Management and IIT Kanpur; and companies such as IBM, Microsoft, Amazon, Facebook and KPMG.

“We have been impressed with Simplilearn’s synchronous model of pedagogy focused on delivering superior outcomes for its learners. Simplilearn has demonstrated strong, profitable growth and we want to turbocharge that growth through focused investments in technology, leveraging Blackstone’s global network and expertise in education technology and bringing to bear our relationships with global universities and enterprises,” Mukesh Mehta, a Senior Managing Director at Blackstone, said.

Blackstone’s Edtech bets

In June, Blackstone had invested in the country’s highest valued edtech start-up BYJU’s in a $340-million round along with a clutch of other investors.

The round happened after it exited its earlier portfolio company Akash Educational Services in April, which was acquired by BYJU’s in a $1-billion deal. According to media reports, Blackstone had earned 2X returns at the time of exit after being invested in Akash for around one and a half years.

Globally, Blackstone had acquired Ascend Learning, which provides technology-based educational content and software tools for students, institutions, and employers. The PE firm also recently invested in software provider for universities, Ellucian, and a B2B SaaS training and development platform Articulate.

Amitabh Jhingan, partner and leader- Education practice, EY Parthenon said, "Simplilearn is the oldest in its segment among peers like UpGrad, Great Learning and Eruditus. It has a track record and operating history of over 10 years, which makes them attractive. They are more familiar with the nuances of this segment and much larger cross-sections of both learners and corporates know them. They have more technology focussed subjects, unlike UpGrad where technology is one of the segments. Simplilearn has a good mix of self-generated and university-created programmes. They have a balanced portfolio of offerings.”

Published on July 19, 2021

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