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Bengaluru: Simplilearn Solutions Pvt. Ltd, which provides certificate courses to working professionals across sectors, has bought Silicon Valley-based digital marketing training company Market Motive for 64 crore to strengthen the Bengaluru-based education technology start-up’s foothold in the US. The deal comes at a time when e-learning has become popular and digital marketing professionals are in high demand, with global digital advertising spending projected to reach $278 billion in 2019.

“Next year, we can stop the classroom courses completely and focus entirely on the online business, as that is the way to be with the advent of technology. That is something that we are considering," said Krishna Kumar, founder and chief executive of Simplilearn.

The company has so far raised $28 million from Mayfield Fund, Kalaari Capital and Helion Venture Partner since its inception in 2009.

Simplilearn, which expects revenue to double to 200 crore this financial year, expects the classroom courses to account for about one-third of the amount—a sharp drop from about 70% last year.

India has become the largest e-learning market after the US, and the sector is projected to grow at a compounded annual rate of 17.4% between 2013 and 2018—twice as fast as the global average, a recent UK-India Business Council report showed.

“Education will go through more changes in the next 10 years than it has happened in the last 100 years based on the use of technology and smartphones. Because of the increase in Internet penetration and technical manpower, India will become a rage," said K. Ganesh, promoter of Growthstory, an angel investment firm, and founder of online education firm TutorVista Global Pvt. Ltd, which was acquired by Pearson Group in 2013 for 980 crore.

“Today’s generation has a short attention span and want to learn through multimedia and interaction with peers, which will be accelerators for e-learning," Ganesh said.

Online education service providers are starting to get traction from investors. According to Tracxn, a company which tracks start-ups, at least 73 start-ups in the online education space have raised institutional funding this year. About $63 million has been invested in such companies since 2014.

The businesses can be broadly classified into two segments: companies such as Toppr, Examify, Embibe and Meritnation which are test-preparation sites and the likes of Simplilearn and Edureka, which provides certificate courses across sectors for working professionals.

While the online test preparation sites are essentially consumer focused, the certificate course providers have the option to tie up with companies to provide training material to their workforce.

“About 30% of our revenues come through B2B practices," said Lovleen Bhatia, co-founder and chief executive of Edureka.

Acquisitions in the sector are, however, far and few. Industry observers are of the opinion that it is too early for consolidation in the sector, as most of the businesses are still nascent. Smaller offline tutorials may have to join forces with online businesses.

“A lot of the conventional coaching centres have to shut down because it will be difficult for them to operate at the scale of online players. A lot of offline businesses may be merging with the online ventures," said Piyush Agrawal, co-founder and chief executive officer of SuperProfs, an online platform for exam preparation.

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