Edtech platform Vedantu takes majority stake in Deeksha for $40 mn

This partnership seeks to leverage Vedantu's technology and integrate it into offline centers to create a scalable hybrid model

Edtech unicorn Vedantu said it has bought a majority stake in Deeksha (Ace Creative Learning Pvt. Ltd) for $40 million. Deeksha is a leading test preparation platform in Karnataka for the board and competitive exam coaching for students of grades 11th and 12th. 

Since 1998, Deeksha taught over 65,000 students through its 39 centres, across 3 states. This partnership seeks to leverage Vedantu's technology and integrate it into offline centres to create a scalable hybrid model which provides access to teaching even in remote Tier 3 and Tier 4 towns at affordable cost.

With this strategic investment, Deeksha will bring in close to 13,000 of its students to Vedantu's platform. 

“We have known the Deeksha team for 10 years. Here the merger happened when we were evaluating how we expand our hybrid strategy, besides organic (growth) which we are already pursuing. We felt great synergy in doubling down and using Deeksha’s offline expertise and network,” said Vamsi Krishna, CEO, and Co-Founder, Vedantu, in an interview. “Even Deeksha felt that in order for it to scale up and expand further, doing purely offline is not the most efficient way. They also wanted to use technology.”

Krishna said that Deeksha would operate as a separate brand. He said Vedantu would scale up Deeksha’s current learning model by deploying its in-house hybrid technology to reach the masses in remote areas and create an impact at scale. This culmination of online and offline capabilities will also help Vedantu to expand hybrid learning initiatives. 

This initiative will further support Deeksha’s learning model that specializes in competitive exam prep in sync with board exam prep through collaboration with schools and colleges. Leveraging Vedantu’s online learning innovation and Deeksha’s massive offline footprint, both partners are aiming at digitizing classrooms in Tier 3 and Tier 4 cities where quality education is not accessible. The aim is to also bring forth immersive learning experiences to students. 

“Through this partnership, we will leverage Vedantu’s Live Class platform for our students and provide a hybrid solution that maximizes learning outcomes through personalized learning algorithms,” said Dr. Sridhar, co-founder, Deeksha.

Vedantu competes with players such as Byju's, Unacademy, Simplilearn, UpGrad and Amazon Academy. It has bought the majority stake in Deeksha at a time when India is witnessing a series of layoffs in the industry and valuations are under stress, especially in the edtech sector, where a growing list of unicorns, have fired employees recently. Vedantu laid off 724 employees this year, according to sources. This is a move that is being seen as a focus on profitability as well as consolidation and cost-cutting drive in the edtech space amid the pandemic. 

Rival company edtech giant Byju’s is set to lay off nearly 2,500, or 5 per cent, of its employees as part of an “optimisation” plan. In June, it also laid off about 500 employees at its group companies —WhiteHat Jr and Toppr.