HCL Group Picks Up Minority Stake In Educational Initiatives For $20 Mn

IT giant HCL Group has struck a deal to pick up a minority stake in education software company Educational Initiatives (Ei) for INR 166 Cr ($20 Mn).

As part of the secondary stake sale, HCL Group acquired a part of the stake held by Mumbai-based private equity firm Gaja Capital in Ei.

Shikhar Malhotra, director, HCL Group, told ET, “We’re thrilled to invest in Ei…the organisation offers a distinctive blend of scalable technology, impactful social initiatives, and sustainable growth.”

The Bengaluru-based company aims to expand to new markets such as South Africa, Kenya, Ghana, and Saudi Arabia. Currently operating in India, UAE, South Africa and Singapore, it is also exploring acquisitions of edtech product companies with a focus on enhancing learning outcomes and asserts a user base of over a million paid users for its offerings.

“I’m excited to welcome HCL Group as investors who share our vision of leveraging the best of pedagogy & technology to improve learning outcomes for millions of students in India and around the world,” Ei chief executive Pranav Kothari told ET.

Founded in 2001 by Srini Raghavan, Sridhar Rajagopalan, Sudhir Ghodke, and Venkat Krishnan, Educational Initiatives is an education research and assessments company. The company has been popular for its K-12 assessments and adaptive learning offerings in India.

Ei operates in a business-to-business (B2B) model, where it provides schools with a suite of assessment and adaptive learning products for teachers and students to help improve learning outcomes.

In September 2022, HCL acquired a majority stake in vernacular edtech platform Guvi, which offers tailor-made courses for learners, universities and employers.

The development comes at a time when edtech platform BYJU’S and its promoters are at war with investors, which has resulted in both sides moving to different courts. Some of BYJU’S investors held an extraordinary general meeting (EGM) last week and passed seven resolutions, including those calling for reconstitution of the board and the ouster of Raveendran and his family members – wife Divya Gokulnath and brother Riju Raveendran – from their management roles at the startup.

However, Byju Raveendran got a temporary relief from the Bengaluru High Court a day before the EGM. The HC, in an interim order, said that any decisions taken by shareholders at the EGM will not come into effect till the next hearing in the case on March 13.

Meanwhile, another edtech unicorn, Physics Wallah, claimed to have onboarded more than 1.5 Mn users on its indigenously-built AI education suite, Alakh AI, within less than two months of its launch.

According to Inc42’s Edtech Report 2022, the Indian edtech market will be a $29 Bn opportunity by 2030.