Veranda Learning Solutions Acquires Tapasya Educational Institutions for INR 362 Cr

Veranda Learning Solutions, the edtech arm of Kalpathi Group, marks a significant move with its acquisition of Tapasya Educational Institutions, enhancing its presence in the commerce higher education landscape.

In a strategic move, Veranda Learning Solutions is set to acquire Tapasya Educational Institutions Private Limited for a substantial INR 362 Crores (approximately $44 million). The edtech giant, a venture of the Kalpathi Group, aims to fortify its ecosystem by introducing more options in the commerce higher education space through this acquisition.

Details of the Acquisition

Tapasya Educational Institutions, operational since 2009, manages 19 inter/PU colleges and 10 degree colleges across Telangana and Karnataka. Anticipating a revenue of INR 65 Crores and an EBITDA of INR 26 Crores in FY24, the institution becomes a valuable addition to Veranda’s educational portfolio.

The acquisition will take place in three tranches. Veranda XL Learning Solutions Pvt Ltd, a wholly-owned subsidiary of Veranda Learning Solutions, will initially acquire a 50% stake in Tapasya for INR 120 Crores by March 31. Subsequently, a 1% stake will be acquired for INR 2.40 Crores in April. The remaining stake will be acquired by early 2028, with the amount contingent on Tapasya’s performance in 2027, having a floor price of INR 240 Crores.

Veranda’s Strategic Vision

Founded in 2018, Veranda has been listed publicly since 2022 and made its mark in the edtech landscape by offering test preparation services for various government exams, banking, insurance, railways, and more. In 2022 alone, Veranda acquired nearly seven businesses for a total sum of INR 400 Crores.

Beyond traditional test prep, Veranda provides certificate-based professional skilling and upskilling programs in emerging technologies such as coding and data science. The conglomerate operates under several brand names, including Veranda RACE, Veranda IAS, Edureka, Six Phrase, Veranda HigherEd, SmartBridge, Talent Academy and Publications, and Sreedhar’s CCE.

In the September quarter, Veranda reported a consolidated net loss decline to INR 1.53 Crores from INR 21.12 Crores in the same period the previous year. Simultaneously, operating revenue tripled to INR 98.37 Crores during the quarter from INR 36.88 Crores a year ago.

Navigating the Edtech Landscape Amid Funding Winter

Veranda’s acquisition comes at a time when the edtech sector in India faces challenges amid a funding downturn. Indian edtech startups witnessed a significant decline in funding from $2.4 billion in 2022 to $267 million in 2023. This has resulted in industry-wide layoffs and a consolidation wave.

According to Inc42 data, Indian edtech startups have laid off nearly 15,000 employees since the beginning of the funding winter last year.

In conclusion, Veranda’s strategic acquisition of Tapasya Educational Institutions demonstrates resilience and expansion in the edtech sector despite prevailing challenges. The move signifies a continued commitment to providing quality education and diversifying offerings in the commerce higher education segment.

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