Edtech platform Simplilearn plans to aggressively expand to international markets, after global private equity major Blackstone acquired a 60% stake in the startup for $250 million, giving exit to its early investors. This is the first time Blackstone has picked a controlling stake in an Indian internet company. Simplilearn, which witnessed 40% growth in new learners amid the pandemic, is looking to grow its revenues from ₹365 crore to ₹1,000 crore by 2023. In an interview, Simplilearn founder and chief executive Krishna Kumar talks about future plans, and why it chose Blackstone as its majority stakeholder. Edited excerpts:
Why did Simplilearn decide to sell a controlling stake to Blackstone, instead of raising funds?
Simplilearn continues to be profitable and we consciously wanted to create an exit outcome for our early investors. We had multiple offers on the table, however we found a great long-term partner in Blackstone. We are still finalizing the details of the deal, and a large portion of the round is for secondary exits. By partnering with Blackstone, we look to leverage their global network and get access to international markets complementary to our growth. Most firms Blackstone has invested in have achieved at least 10-fold growth and gone public. With Blackstone’s backing we want to repeat that trend, and achieve aggressive organic growth, besides focussing on acquisitions to grow our business inorganically in certain markets. (Early investors Kalaari Capital, Helion Ventures and Mayfield will exit).
Blackstone has also invested in competitor Byju’s, which is likely to enter the skilling market. Is that a challenge for Simplilearn?
Not at all. There are several global investors, such as SoftBank, which have also invested in competing businesses. We are confident about our growth as we want to become the largest digital skilling company in the world.
What are your growth and international expansion plans?
We have a presence in India, the US and Singapore, with customers across 150 countries. We will be doubling down on Europe and the Middle East. We are also introducing new languages, including Portuguese and Spanish, to expand our presence in Latin American countries. By next year, we might make one or two acquisitions to grow internationally and enhance our products.
From a product standpoint, we will largely continue our focus on digital skilling and will introduce new offerings for our enterprise customers. We are also trying to tap learners early by offering digital courses to high school students, in association with renowned global universities.
With a focus on growth, what are your projections on revenues?
Currently, international geographies contribute to over 60% of Simplilearn’s revenues. This might increase to 70% with the inorganic bets. Close to 90% of our 1,500 employees resides in India and builds for international geographies. So, India continues to be loss making due to cost structures.
However, on an overall perspective we have remained profitable for last four years. Our unaccounted revenues for FY21 stand at ₹365 crore. We look to end FY22 with absolute revenues of ₹600 crore and FY23 with ₹1,000 crore on the basis of organic growth.
Will you be raising more funds considering your growth plans?
Depending on our plans, we might look to raise another round of funding in the next 12 months. We are not a unicorn yet, but will be there soon with the subsequent raise.
Considering the trend, does Simplilearn have plans to go public?
We have no immediate plans and our focus is on growth. Once we think we have hit the right revenue run rate, we might consider going public in the next three years.
This article was first published on livemint.com.