Why M&A in Edtech Makes Perfect Sense
Let us reflect on the M&A opportunities in the Edtech sector. WhiteHat Jr.’s acquisition comes amidst an economic slow down when experts had already been speculating consolidation across industries. And M&A is expected to be all the more active in Edtech sector. Here’s Why:
According to DataLabs, India is home to over 3,300 Edtech startups. However a chunk of the market share is enjoyed by a handful of big players like Byju’s, Vendatu, Unacademy and Toppr. Which means that there are a lot of small fish that will be interested in M&A amidst the cash crunch.
M&A’s are beneficial for financial synergies and rapid inorganic growth. The peculiarity of the Edtech sector is that the assets of the company are an easy sell to the interested acquirer.
If you were a last mile delivery startup, the best-selling point to let’s say Swiggy would be your Delivery fleet, Restaurant base, your Customer base and if you’re too good then even your tech.
In the Edtech space on the other hand, apart from bringing the teacher base and the customer base to the table, you also bring the assets that you create over time in the form of Educational content and the Pedagogy that cannot be easily replicated by the industry.
Around 628 M&As have been observed in the startup ecosystem between 2014-19. Of these, 6% (35) are in edtech. Most active acquirers are Byju’s (5), Xseed education (2) and Next Education (2).
This article is a part of the August'20 edition of our Startup Newsletter. Here's the complete publication: