Deal focus: Vedantu adds to war chest as rivals encroach

Indian educational technology firm Mastree had not been incubated 12 months when larger peer Unacademy swooped in for an acquisition, paying $50 million in cash and stock. “It was quite unexpected,” says Sajith Pai, a partner at Blume Ventures who led the firm’s earlier investment in Mastree.

The company aims to help young learners acquire critical thinking skills and learn academic concepts in an accessible manner through games and quizzes. It is one of five relatively recent acquisitions by Unacademy, which has historically focused on exam preparation for students and job-seekers. Mastree is expected to continue operating independently for now.  

“There’s a lot of work to be done to improve the process of learning in the country,” says Pai, pointing to Mastree as an example of a growing crop of start-ups that do not focus solely on exam preparation.

Vedantu, operator of a live tutoring platform, could be considered one. The company, which closed an extended Series C round of $100 million two weeks ago, wants to improve access to quality teaching for students from grades one through 12. However, students preparing for exams are thought to make up a large part of its userbase.

“Eventually, everybody will compete with everyone else – for example, [video-based education start-up] Byju's is expected to get into live tutoring while Unacademy is somehow getting into learning,” Pai states. He and colleague recently penned a holistic report on the industry, which they expect it to quadruple in size to $4 billion by 2025.

Consumer-facing education start-ups have grabbed the spotlight with many students unable to leave home due to the COVID-19 pandemic. Meanwhile, a host of other start-ups have seen greater demand for their services as they help offline academic institutions get online.  

For non-test services, Vedantu has a head start and comparatively a lower cost base than Unacademy – the latter’s initial claim to fame involves a roster of star tutors that excelled at the Civil Services Examinations. Vedantu has also begun to offer online tuition for primary school students and it claims to have pioneered the concept of in-class quizzes to boost learning through gamification.

“There's a parallel group of users emerging that may not be test-takers. Apart from those people that see merit as the ability to do well in a test, there are others who evaluate candidates as a total package,” says Pai.

Moreover, he contends that the overall market may not be as large as Indian media likes to claim. There might only be around 20 million serious test-takers that could sign up as users for an online education platform every year. These include individuals carrying out tests to qualify for various types of esoteric jobs such as working as a police constable in rural India.

“Nobody has converted even 15% of the total pool of potential users so there is still a long way to go,” Pai says.

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• Topics
• South Asia
• Technology
• Consumer
• Expansion
• India
• Education
• Blume Ventures