Blackstone's $250 mn to make Simplilearn world's top digital skills co: CEO

The firm, which is already global, will use the funding to double down in its primary markets such as the US and India and expand in Europe and LatAm

Private equity giant Blackstone is investing $250 million in edtech startup Simplilearn. Blackstone said that private equity funds managed by it have entered into a definitive agreement to acquire a controlling stake in Simplilearn Solutions Pvt Ltd, a leading online learning ‘bootcamp’ based in India offering digital skills training and courses to working professionals all over the world. The company declined to reveal the valuation. But according to sources, the funding has increased the valuation of Simplilearn more than four times to $350 million.

This is a primary and secondary transaction where investors such as Kalaari Capital, Helion Venture Partners, and Mayfield Fund would exit as part of this deal. The firm is also working on a wealth creation opportunity where employees will have the option to liquidate their vested Esops (employees stock ownership plan) in the buyback.

Simplilearn was founded in 2010 by its chief executive officer Krishna Kumar. 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 and machine learning, digital marketing, and cybersecurity.

“We are a profitable business and were approaching it in a certain manner,” said Kumar. “When this opportunity (funding) came in our way, we were able to give exit to our investors and it gave us a lot of firepower to accelerate our business. Our aim is to be the largest digital skilling company in the world.”

The company’s business is already global. The funding would help it to expand into markets where it is not present and double down in the regions where it has little presence. It would also accelerate its partnerships with top universities and companies.

“The idea is to operate across the globe. We already have customers in over 150 countries,” said Kumar. “Right now, we are primarily present in India and the US. We would double down there and also in markets such as Europe and Latin America.”

Simplilearn offers programs in partnership with top global and Indian universities, and enterprises to enable learners to get the best of academic and industry exposure. The company is currently collaborating with renowned 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. It also has collaborations with companies such as IBM, Microsoft, Amazon, Facebook and KPMG. These courses allow professionals to develop digital skills and help businesses upskill their workforce to keep up with the constantly changing demands driven by digitization. More than two million professionals globally have used Simplilearn to date.

“The pandemic has only accelerated the need for digital skills and the industry has demonstrated absolute readiness for upskilling online,” said Kumar. “Hence, this is the most opportune time to take the next big leap in our journey to build the world’s largest digital skilling company.”

Blackstone is expected to add significant value to our Simplilearn because of its scale and commitment to building businesses, and global network, which will enable it to develop partnerships with businesses and universities as Simplilearn continues to expand around the world.

“This is Blackstone’s first private equity investment in Asia in a consumer technology company,” said Amit Dixit, head of Asia for Blackstone Private Equity. “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.”

Mukesh Mehta, a senior managing director at Blackstone said the firm has been impressed with Simplilearn’s synchronous model of pedagogy focused on delivering superior outcomes for its learners. He said that Simplilearn has demonstrated strong, profitable growth.

“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,” said Mehta.

Blackstone brings global expertise in education technology. This includes the partnership with Aakash Educational Services and Byju’s to build India’s largest digitally-enabled omnichannel education company.  It also did the acquisition of Ascend Learning, which provides technology-based educational content and software tools for students, institutions, and employers. It also made investments in Ellucian (a leading software provider to universities) and Articulate (a SaaS training and development platform for companies).

Avendus Capital was the exclusive financial advisor to Simplilearn and its shareholders on the transaction.