 "Kashyap Dalal, co-founder and chief operating officer, Simplilearn")
Simplilearn plans acquisitions and global expansion amid a funding winter and macro-economic uncertainty, said a senior executive of the edtech firm.
The Blackstone-backed firm, which skills and trains people online, grew 50 per cent through internal growth and 50 per cent by acquiring US-based education company Fullstack Academy.
“We aim to achieve 40 per cent to 50 per cent growth for the next financial year as well (April 2023-March 2024) and turn profitable,” said Kashyap Dalal, co-founder and chief operating officer, Simplilearn, in an interview.
“We're trying to keep driving that growth so that we can create a larger impact and help more people upskill. This is driven by our different plans across our two key markets, India and the US. We are looking at strategies like different product lines, and launches, as well as some acquisitions that can help us move fast,” he said.
The firm expects to achieve a revenue of Rs 1600 crore-Rs 1700 crore by March 2024. Simplilearn competes with upGrad, Coursera, 2U, edX, Chegg, Skillsoft, and Byju's-owned Great Learning.
The company’s consolidated unaudited revenue for FY 2023 was around Rs 1200 crore, compared to Rs 500 crore in FY 2022 driven by the US and India markets.
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According to media reports, the firm clocked Rs 480 crore in revenue in FY22 from Rs 253 crore in FY20. Losses spiked to Rs 150 crore in FY22 due to marketing, branding and future product and leadership investments.
However, the company said that its revenue for FY 2023 grew by 120 per cent without any expansion in losses.
A part of this growth was due to Simplilearn acquiring US-based Fullstack last year for an all-cash transaction. Fullstack's existing network across the US provided Simplilearn access to new university partnerships.
“We'll keep looking at other relevant acquisitions (globally) which would help us add new markets, areas, programmes and categories,” said Dalal. “Same is the case for India. We are looking at potential acquisitions here which can help us to get ahead and consolidate our leadership position here.”
In November 2022, Simplilearn raised $45 million from a consortium led by GSV Ventures, a multi-stage venture capital firm. Clal Insurance and DisruptAD, a venture platform, also participated in the funding round. In 2021, Simplilearn attracted an investment of $250 million by private equity firm, Blackstone Group.
The firm is also witnessing an uptick in the number of working professionals upskilling themselves amid massive layoffs in the tech sector. Dalal said it is the K-12 education space, where large companies had gone overboard in terms of hiring during the Covid-19 phase and the business was not scaling up fast. This resulted in a lot of layoffs in the edtech industry.
“We currently operate in the professional skilling space where we feel the growth is very robust compared to the up and down cycles (witnessed) by other players, especially in the K-12 space,” said Dalal. “The professional skilling space is going to be stable over the next many quarters. In fact, the companies that do well will start adding to the teams rather than reducing the headcount.”
Simplilearn is hiring around 80-100 people every month, and the numbers are expected to grow in the next six months. By the end of FY 2024, the company aims to hire over 1000 people.
Dalal said that Simplilearn is seeing the green shoots emerging where some of the large tech companies have actually started making plans to hire talent.
“Our forecast is that in the next six to nine months, it’s again going to be a phase where technology companies would start hiring and expanding their teams because the consolidation phase is over,” said Dalal. “That will create a big drive for more people to upskill.”
Dalal said that in the last 5-7 years skills related to artificial intelligence (AI), cybersecurity and cloud computing were in demand at organisations. What is going to drive growth next is upskilling among students and professionals in ChatGPT, a natural language processing tool driven by AI.
“So it triggers a question for people if I have to be relevant for the next 5-10 years from now, what skills do I need to add to myself,” said Dalal. “We see ChatGPT as the second wave of growth for skilling. We are very excited to work on that and build for the next 5-10 years.”
Simplilearn conducts more than 3000 live classes per month, with an average of 70,000 learners who together spend more than 500,000 hours each month on the platform.
