Uolo Technologies has acquired Bengaluru-based code-learning platform Tekie in an all-stock deal. The transaction involves a cash component for Tekie’s two founders Naman Mukund and Anand Verma, in addition to equity that will vest over a three-year period and a performance-linked incentive. The sum was not disclosed.
Uolo, a business-to-business (B2B) ed-tech startup backed by investors such as Blume Ventures, Omidyar Network and Winter Capital, is looking at opportunities to partner with or acquire companies in the math learning and STEM (science, technology, engineering and mathematics) learning spaces, co-founder and chief executive Pallav Pandey told ET.
On December 9, ET reported that Uolo raised $22.5 million in a Series A funding round led by Dubai-based growth-stage investment firm Winter Capital. Morphosis Venture Capital, another Dubai-based fund, is another investor in the company.
Uolo previously raised $3 million in seed funding led by Blume Ventures in November 2020.
It runs a parent-teacher communication software and an enterprise resource planning (ERP) management solution.
Pandey said an estimated 120 million children attend India’s more than 400,000 private schools, and the company has onboarded 8,500 schools so far, with an aim to have around 50,000 schools on its platform by 2025.
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“The idea of Uolo is that we take ed-tech solutions to the masses in partnership with private schools. Technology in education can really do wonders but it is coming at very expensive prices. The cost of ed-tech solutions today is Rs 20,000-Rs 30,000 a year, but people do not have that much money to spend. It has to become more affordable and for that to happen, it has to be available through schools,” he said.Founded by Mukund and Verma in 2017, Tekie offers schools a coding curriculum that works in over 100 schools. The startup’s investors included GSV Ventures, Multiply Ventures and Better Capital. GSV Ventures is also an investor in Lead School, which is one of the primary competitors of Uolo.
“Once the schools are onboarded to a platform, they will need ed-tech products and solutions. Uolo has created a platform which 8,500 schools have boarded, and now what we’re doing is that we’re bringing on education products. Education products typically have long gestation periods. So, partnering or acquiring is a better strategy. We had partnered with Tekie earlier, and were working closely with them,” Pandey said, referring to the acquisition.
ETtech
Ed-tech Reset
In the backdrop of a funding winter, including in the ed-tech space, startups have started to cut costs, and seek sustainable offline models with profit-generating revenue streams.
Particularly in the K-12 segment of ed-tech, companies are moving away from the pandemic-led boom in online coaching to a model where they are partnering with schools to digitise them.
Edtech investors have pointed to the importance of a physical schooling system in the K-12 category, and the potential for startups to complement the school system, instead of attempting to substitute it.
When the Covid-19 outbreak turned into a pandemic in 2020, edtech companies’ fortunes soared as they stepped in to fill the learning void left by schools and coaching centres shutting their doors during lockdowns globally and in India.
As per data sourced from Venture Intelligence, VC funding into ed-tech startups less than halved to $1.94 billion in 2022, from $4.08 billion in 2021.
The drop in the aggregate amount of money raised happened for startups across various funding rounds, including in early-stage rounds such as seed, Series A and Series B.
Funding through these three rounds put together saw ed-tech startups raise $483 million in 2022, down 35% from $748 million in 2021.
Sector experts have pointed out that with funding drying up for early stage startups, they may be forced to look at being acquired by some bigger or well-funded companies in the space.
Explaining the rationale behind going for an acquisition at a time when investors are shifting focus to business fundamentals such as profitability and cost of customer acquisition, Pandey said: “Unlike a lot of other ed-tech companies that spend Rs 20,000-Rs 30,000 to acquire a customer, we are tying up with schools and are practically a zero CAC (customer acquisition cost) company.”
“We are extremely cautious about how much we burn, but these acquisitions are planned to make Uolo a meaningful platform,” he added.
(Illustration and graphics by Rahul Awasthi)