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MUMBAI : India’s new-age edtech companies, which grew rapidly in 2020 during the first wave of the pandemic, are continuing to grow inorganically this year by quickly acquiring companies, spurred by a rise in remote learning and online education because of the continuing pandemic scare and partial lockdowns.

On 5 April, edtech unicorn Byju’s announced the acquisition of Aakash Educational Services Ltd. The cash-and-stock deal was finalized at almost $1 billion, making it one of the most expensive deals in India’s burgeoning edtech space. Byju’s, owned and operated by Think and Learn Pvt. Ltd, did not stop there. It then acquired Epic Creations Inc., Great Learning Education Pte Ltd and GeoGebra GmBH to expand into global markets.

Rival firm Unacademy acquired Sequoia-backed FJS Tech Pvt. Ltd in July, K12 Technoservices Pvt. Ltd in October and Incassable Tech Pvt. Ltd in November, to expand and consolidate its domestic footprint. Another edtech, upGrad, led by Ronnie Screwvala, acquired KnowledgeHut Inc. in July and Global Study Partners in November to expand its footprint into overseas markets.

Edtech companies, especially the larger ones, which were already riding high on a strong base of 2020, further built on and grabbed the massive opportunity to explore untapped territories and penetrate deep into India’s growing edtech market that is expected to be worth $3.5 billion by the end of 2022, by raising funds aggressively, according to a recent report by BLinC Invest, a venture capital firm.

India got three new unicorns, or unlisted companies with valuations of at least $1 billion, in the edtech space in 2021, Eduditus, upGrad and Vedantu, taking the total number of edtech unicorns in the country to five. These startups have cumulatively acquired 21 companies in 2021, spending a total of about $3 billion. The startups financed the acquisitions with the $1.75 billion they raised this year alone, according to data compiled by VCCEdge, the data and intelligence platform of VCCircle.

The strategy behind the fund-raising and acquisitions was simple. The companies wanted to consolidate their positions and expand geographically, horizontally and vertically in the edtech space. While a large chunk of the funds raised by these startups was deployed to acquire subscribers, hire new educators and enhance their technology platforms, the growth-hungry companies used a significant part of it for inorganic expansion.

In a recent interview, Mayank Kumar, co-founder and managing director of upGrad, said it aims to become two to four times bigger than its nearest rival through acquisitions. Screwvala, the co-founder and chairman of upGrad, contended that consolidation in the edtech sector benefits all. “Consolidation is overall good as it matures the segment rapidly, takes away the fragmentation of the market, and allows scale and high-quality offering to consumers at very accessible price points," he said.

Anita Kishore, chief strategy officer, Byju’s, said the company is always on the lookout for acquisitions and partnerships that would allow it to offer more subjects and grades to users, while expanding into newer markets.

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