Sequoia Mulls Investing $50 Mn In Phygital Edtech Startup K12 Techno

Even as cash crunch continues to engulf the Indian edtech sector, venture capital firm Sequoia India is reportedly mulling investing $50 Mn in its portfolio startup K12 Techno Services.

The phygital edtech startup had also engaged with TPG and Accel in recent weeks, Techcrunch said. 

It is pertinent to note that Sequoia is already an investor in K12 Techno Services, alongside Belgian investment fund Sofina and Navneet Learning. 

Incorporated in 2010, K12 Techno Services operates four subsidiaries that offer niche products in categories such as school management platform and schools. It operates a clutch of products, targeting students across both digital and physical formats. 

The startup’s promoters exited the business in 2016 and their stake was later picked up by Sequoia Capital India. Navneet Learning LLP also owns a considerable stake in the platform.

It runs around 90 branches of schools under the brand name Orchids – The International Schools in cities such as Bengaluru, Delhi, Mumbai, Pune and others. Another subsidiary Eduvate operates a school management platform that caters to more than 300 schools. 

K12-owned UnleashEng is a children-focused english learning platform while another subsidiary Sparklebox sells custom made activity kits for children on its ecommerce platform. 

The startup has largely stayed under the radar, not revealing much of its funding details. While Tracxn estimates the startup has raised more than $75 Mn in previous rounds, Crunchbase claims that the startup has raised $21 Mn till date. 

The startup largely competes with players such as Educomp and Educare in the highly competitive yet niche domain. 

The Edtech Crisis

The move comes at a time when the overall edtech landscape in India continues to be bogged down by a funding crunch and raging layoffs. 

The poster child of the Indian edtech revolution, BYJU’S, has lately been panned for rising costs, even as critics have called on the startup giant to generate profits. 

Bengaluru-based Vedantu, too, has been struggling to make revenues as schools reopen and students shun online education. 

Another major player Unacademy has reportedly shut down its K-12 business and has fired more than 1,100 employees in mass layoffs across its products.

Marred by increasing costs and high cash burn, many of these players have resorted to mass layoffs. So far, this year, more than 7,000 employees working in the edtech space have been laid off, led by BYJU’S, which fired nearly 4,000 employees across its subsidiaries

Multiple edtech startups such as Lido Learning, Crejo.Fun, Udayy, and SuperLearn have shut operations this year, after failing to raise funds. 

So severe has been the funding winter that Indian edtech startups have managed to pick up a mere $2.2 Bn in funding in the first nine months of this year. Hovering close to pre-pandemic levels, the funding numbers stood at $3 Bn in the entirety of 2020.

Amidst all the gloom and doom, the space has also been witnessing small silver linings. Earlier this month, edtech decacorn BYJU’S announced that it raised $250 Mn in a mix of equity and debt from its existing investors. Close on the heels of that, skilling platform Masai School raised INR 38.62 Cr in a Pre-Series B funding round led by India Quotient and On Mauritius, earlier last week.