US-based Ebix emerges as highest bidder for Educomp, also to acquire major stake in Smartclass Educational

The US-based insurance software provider Ebix has now forayed into India’s e-learning market by securing a strategic majority stake for $8 million in Smartclass Educational Services Pvt Ltd. This is Ebix’s 11th acquisition in India in less than a year. The $2.5 billion corporation headquartered in Georgia, USA, has already deployed $300 million to acquire several payments, forex, remittance and travel companies.

Catering to K-12 education sector in India, Smartclass is a leading Indian e-learning company. According to the terms of the agreement, Ebix will pay in cash for its stake buy. A statement declared that the platform will be integrated into Ebix’s education and e-learning initiatives in India once the acquisition is complete.

Earlier this year, Ebix had also emerged as the highest bidder for Educomp Solutions Limited. This could be a part of the company’s foray into the relatively nascent Indian education market, which also has seen interest from the likes of several start-ups and even the founder of Facebook. The proposal has reportedly been cleared by Educomp’s lenders, and now awaits approval from NCLT. Ebix is expected to deploy over $60 million to turn around Educomp, which set a precedent for ed-tech ventures in India by revolutionizing the country’s digital education scenario.

Smart class offers e-learning products and services in an on-demand subscription basis. It provides content in 2D, 3D, virtual reality and animation for accredited school education. The company has a workforce of around 500 employees dedicated to R&D &customer engagement, and another 500 in sales and marketing. This makes the deal with Smartclass even more crucial since the acquisition will only help Ebix to move forward in its acquisition of Educomp.

The deal will make Ebix compete for head-on with established industry players like Byju’s, which already has a huge consumer base of over 250 million users. Byju’s is also backed by potent investors like Sequoia, China’s Tencent and the Chan Zuckerberg Foundation. This might make one wonder whether Ebix would really be a tough competition to Byju’s in the Indian education market – while catering to the changing dynamics of the industry.

A person involved with the negotiations gave his statement on the condition of anonymity, “It will all depend upon the quality of the educational solution and footprint into schools. Educompholds a huge goodwill and is, in many ways, the founder of digital classroom setup in India. That is something an investor like Ebix would be interested in, if they wish to create a stronghold in the Indian online education market.”

Founder Chairman, President and Chief Executive Officer of Ebix, Robin Raina stated that he expects India to contribute an ambitious $500 million to Ebix global revenues over the next 3 years. “We have earmarked an investment of $100 million in India’s e-learning sector and the acquisition of Smartclass is a logical first step to establish a presence in the country’s e-learning markets,” he added.

The current market trends and the investments in the education sector could possibly bring changes into the expanding education sector as India looks forward to train and education its next crop of students.