Google-backed edtech Adda247 bets on skilling with PrepInsta acquisition

Gurugram-based Adda247, originally started as a test-prep venture, is now betting on the skilling space with the acquisition of PrepInsta. The companies did not disclose the terms of the current transaction, including the deal size.

The WestBridge-backed edtech firm's acquisition of PrepInsta marked its first inorganic move in the skilling space, which has attracted increasing interest from edtech firms as the demand to close the gap between learners’ skills and industry needs intensifies. PrepInsta prepares students for assessments and interviews, helping them secure tech job opportunities.

This acquisition follows the appointment of Bimaljeet Singh Bhasin to lead the edtech company’s skilling and higher education division, aimed at setting up new growth engines and expansion in these areas.

In a conversation with YourStory, Anil Nagar, Founder and CEO of Adda247, highlighted that while lakhs of learners work hard, job opportunities in the government sector are limited. He added that the goal is to help its learners secure positions in the private sector as well.

Until now, the firm focused largely on government jobs, and as an integrated employment provider, it recognised that the private sector offers greater opportunities given its size and scale, Bhasin noted, adding that tech and BFSI are the two largest areas offering employment opportunities.

The Google-backed company is developing its banking, financial services, and insurance (BFSI) skilling initiatives in-house, with the PrepInsta acquisition aimed at enhancing its tech-focused skilling offerings, according to Nagar.

“We want to play in these two sectors. We will do both organic and inorganic initiatives, and will also interplay across both B2C and B2B,” Bhasin told YourStory, adding that the company will tap into other private sector areas as well at some point in the future.

“There are many organic things that we are doing, including building a team. I have come on board and there are more leaders already. Inorganic, if it makes sense, if it fits in well, just like PrepInsta acquisition, we would be happy to consider. We have a lot of appetite,” elaborated Bhasin.

According to Bhasin, the firm has begun engaging with several large private banks that have significant hiring needs, while also working on achieving the right product-market fit for new solutions and discussing potential offerings with various enterprises.

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The edtech startup serves students in Tier II and III cities and smaller towns, providing online education in 12 vernacular languages. It claims to have over 40 million monthly users and two million students enrolled in its premium courses. 

Adda247 registered a revenue of Rs 243.39 crore for the financial year ending March 31, 2024, an 88% increase from Rs 129.65 crore in the previous fiscal year, while its net loss narrowed by 66% to Rs 101 crore.

In FY24, the company aims to break even despite making significant investments in the skilling business, Nagar noted, adding that in the past 2-3 months, the company has experienced some months of profitability and breakeven.

The startup is expecting the skilling business to start bringing in money from the last quarter of this fiscal year, but the impact will be apparent in the next year, according to the founder.

Since digital and tech skills are essential for government employees as well, the company can offer these skills to individuals who have previously secured jobs after preparing through its platform—tapping into its existing learner base for further business.

Meanwhile, the edtech startup is focused on expanding into new categories while also broadening and deepening its existing ones. As its skilling business grows, it aims to go deeper into the test-prep offerings.

Adda247 acquired the UPSC prep platform StudyIQ in January 2021, followed by the 3D experiential learning platform Veeksha in July 2023, and Ekagrata Eduserv, a specialist in chartered accountancy test preparation, in July this year.

The company last raised $35 million in a round led by WestBridge Capital, with participation from existing investors, including Info Edge (India) and Asha Impact, and the addition of Google as a new investor. According to Tracxn, the edtech firm has raised a total of $64.4 million in equity funding to date.

“We don’t need funds right now. The only situation I foresee where we might need funds is if we pursue a large acquisition. Otherwise, for building the business as we are currently, we likely won’t need additional funding,” Nagar said, adding that there has been inbound interest in the last six months.

Recently, another WestBridge-backed edtech firm PhysicsWallah (PW) bagged $210 million in a Series B funding round—a significant milestone given the scarcity of substantial deals in India’s edtech sector lately. 

Interestingly, PW has been ramping up its skilling business for over a year, aiming to capture a share of the skilling, reskilling, and upskilling market amid growing demand.

Adda247 and PW—relatively new entrants in the skilling business—are competing with more established players like upGrad, Eruditus, Simplilearn, and Scaler.