Majority Stake: Blackstone’s $250-million bet on Simplilearn

Simplilearn’s Kumar said the company would consider launching an initial public offering (IPO) in the coming years but did not specify a timeline.

Private equity funds managed by Blackstone have acquired a majority stake in ed-tech firm Simplilearn in a $250-million deal. The investment, which includes a mix of primary and secondary transactions, has given full exit to the start-up’s early investors Helion Ventures Partners, Mayfield Fund and Kalaari Capital, Simplilearn’s founder & CEO Krishna Kumar told FE.

Blackstone will acquire close to 70% stake in the start-up, sources said.

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The Bengaluru, San Francisco and California-based company will leverage Blackstone’s global footprint to expand its reach. The firm will use the fresh capital infusion to launch new programmes, ink partnerships with more businesses and universities, create better products and build on its technological capabilities, Kumar said.

Founded in 2010, Simplilearn offers over 100 programmes in collaboration with global and Indian universities that help early and mid-career professionals acquire new-age digital skills across functions like cloud, data science, artificial intelligence & machine learning and cybersecurity. Brands including IBM, Microsoft and Amazon use the platform to upskill their employees. Simplilearn claims to have catered to more than two million professionals across 150 countries. The platform that competes with upGrad among a clutch of other Indian ed-tech firms offers over 1,500 live classes every month and has around 100,000 monthly active users.

The investment marks Blackstone’s first private equity investment (for a majority stake) in Asia in a consumer technology company. The US-based firm manages $649 billion in assets which includes investment vehicles focused on private equity, real estate, public debt and equity and real estate. “Like many other sectors, technology is disrupting education and education technology has been a high conviction theme for Blackstone in India and globally…..we expect this to be the first of many such investments in Asia,” Amit Dixit, head of Asia for Blackstone Private Equity, said.

Blackstone had been an investor in Aakash Educational Services but exited the firm after Byju’s acquired the brick-and-mortar test prep service provider in a close to $1-billion cash and stock deal. Currently, Blackstone holds a minority stake in Byju’s.

The local ed-tech space has seen a rush of deals since the onset of the pandemic as closure of educational institutions increased demand for online learning, boosting subscriptions. People also became more open to opting for professional courses online. Industry experts are betting on the growth of a hybrid mode of learning post the pandemic. Byju’s and upGrad are among companies that raised fresh rounds of funding this year.

Simplilearn’s Kumar said the company would consider launching an initial public offering (IPO) in the coming years but did not specify a timeline.

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