Global private equity firm Blackstone is looking to sell its majority stake in Simplilearn, more than three years after buying over 60% in the digital learning platform.
Four people aware of the plan confirmed the plan, adding Blackstone’s investment bankers have sounded out potential buyers. The global investor had invested about $250 million (over ₹1,870 crore) in the Bengaluru-based startup in 2021.
“They are actively scouting for buyers; bankers have been reaching out to enquire about people’s interest,” one of the four people said. Mint could not identify the investment bankers involved.
Securing an attractive valuation for its portfolio company is crucial for Blackstone, given that it is in the middle of raising a $10 billion Asian fund. Therefore, it may not immediately sell if the market valuation does not match up, a second person added.
Blackstone did not respond to a query, while a Simplilearn spokesperson said the investor neither plans to exit, nor has appointed bankers.
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Founded in 2010, Simplilearn offers digital upskilling certifications to learners across the globe. The company currently offers over 1,500 live online classes each month, teaching over eight million learners.
The company has so far raised close to $300 million in equity funding. Simplilearn was last valued at around $600 million in 2022 when it raised $45 million from edtech-focused venture capital firm GSV Ventures, with participation from Clal Insurance and DisruptAD. This was at a time investors were channelling large investments at steep valuations especially in edtech companies, before a start of a funding winter.
As funding dried up over the next two years, founders had to curtail growth spending and focus on profitability. Simplilearn was no different–Beginning FY24, Simplilearn switched focus to profitability, shutting down verticals such as fresher upskilling and study-abroad, slashing its Ebitda losses by 75%.
Simplilearn, which remained profitable till 2021, began chasing high growth soon after, affecting profitability in the last three financial years. “The focus is to bring the company back into the black. Growth is not a sole focus area anymore,” the person said. The company achieved profitability in the last two quarters of 2024, the person added.
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This is similar to the slump in the larger edtech sector in the years after covid, when physical classes resumed. In the higher education and upskilling segment too, growth has slackened across firms. With funding drying up in the sector, only profitable companies or those who have a clear path to profitability have found investors in the last 12 months.
Simplilearn, which was growing at a rate of 35-45% since FY21, clocked a growth of about 10% in FY24.
“Blackstone takes large bets. The company invested in 2021 with the expectation of a massive boom, which did not happen. They do not want to continue,” the third person added.
Simplilearn is now looking to scale its overseas business, especially in the US, the second person said. According to a 2024 report by consulting firm Technopak Advisors, the market for online higher education and upskilling was valued at ₹30,000 crore in FY23, and is likely to grow at a compounded rate of 23.1% over the next five years.
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