PE firm Kaizen ties up with Bertelsmann to invest $4.1M in WizIQ
Education-focused private equity firm Kaizen is partnering with German media major Bertelsmann to invest Rs 22 crore or $4.1 million in online education firm AuthorGen Technologies Pvt Ltd, a subsidiary of the listed education major Educomp Solutions Ltd.
AuthorGen’s flagship product is WizIQ, which provides an online education platform through SaaS-based virtual classroom for teachers, trainers, colleges & universities, high schools and training & tutoring centres around the world.
The multi-tiered transaction also involves merger of authorSTREAM, another online platform that PowerPoint users around the world use to share presentation-based content via AuthorGen. authorSTREAM, which is an offshoot of AuthorGen (both companies have the same promoter), is backed by angel investor Rajan Anandan.
Kaizen is leading the investment in one of the rare instances of overseas strategic investor partnering with a PE firm to invest in an Indian company. Earlier, AuthorGen was a wholly owned subsidiary of Educomp Online Supplemental Services. Educomp will continue to remain a shareholder in the company post transaction.
This is the second such transaction by Educomp, which sold its 50 per cent stake in pre-school chain EuroKids International earlier this month. The stake was sold to a consortium of financial investors, led by Gaja Capital Partners.
Shares of Educomp fell 4.21 per cent to close at Rs 128.65 on Thursday in a Mumbai market down 0.51 per cent.
This is the fifth investment by Kaizen and the first direct investment by Bertelsmann in India after the opening of a corporate centre last year.
WizIQ has over 2.5 million students and 200,000 tutors, and its revenues are growing at over 200 per cent annually, according to a company statement. The product is used for online teaching in institutions like IIT-Delhi in India, Atlantic University at Virginia Beach and Des Moines Area Community Colleges in Iowa, US. The product is currently available in a freemium model and most of its revenues come from outside India.
The virtual classroom software works on computers, iPad and Android tablets, and can be customised for several languages such as Arabic and Hebrew, Chinese, Czech, Dutch, English, French, Polish, Persian, Portuguese, Russian, Spanish, Thai and Turkish.
authorSTREAM has 4 million users and a lot of them are teachers, trainers and students. The merger will help WizIQ reach out to a much larger audience than it could on its own, said a statement. The merger between the two firms is a stock deal. AuthorGen currently has offices in Chandigarh and Hyderabad.
“We are extremely pleased to partner with WizIQ and help build a global education technology company,” said Pankaj Makkar, managing director of Bertelsmann India Corporate Center. “Over the past few years, Bertelsmann has invested in fast-growing education companies through its funds in the US, Europe, Brazil and China. With clients in more than 104 countries, WizIQ has already built a global product and we see exciting opportunities for the company in the future,” he added.
“The concept of online collaborative learning is taking shape across the world and the market potential is quite significant. WizIQ addresses the need of tutors to be able to teach remotely and the requirement of students to access best teaching resources around the world. We see WizIQ addressing a multi-billion dollar market in the future and we are excited to become a partner in the company’s growth,” said Sandeep Aneja, founder and managing director of Kaizen Private Equity.
(Edited by Sanghamitra Mandal)