Kedaara picks stake in Orchids schools owner

   2023-09-14 18:09

New Delhi: Homegrown private equity player Kedaara Capital has struck another large bet, days after making one of its largest transactions in recent times.

The PE firm has signed a fat cheque for a significant minority stake in K12 Techno Services Pvt. Ltd, which runs the chain of Orchids International Schools, according to a press statement. The transaction will also provide a partial exit to Peak XV (erstwhile Sequoia Capital India), one of K12’s existing institutional investors.

While the financial details of the transaction were not disclosed by the parties, two people aware of the development told VCCircle that Kedaara may have invested 1,300-1,500 crore ($156-180 million) in the Bengaluru-based K-12 school operator.

“India has over 260 million students enrolled in the K-12 segment, that aspire for accessible, and holistic education. K12 Techno has helped schools bridge this gap by leveraging technology and process orientation,” said Sunish Sharma, founder and managing partner, Kedaara Capital.

K12 Techno Services was incorporated in March 2010 by M. Venkatanarayana and his son M.S.C. Srikanth to provide education services to state board schools under Sri Gowtham Academy of General and Technical Education. It made losses as it provided services to low-cost state board schools. In 2016, the promoters exited the company, and it was acquired by Sequoia Capital and Navneet Learning.

Under the new management, the company provides management services to ICSE and CBSE curriculum schools from kindergarten to X-XII, based in large metros like Bengaluru and Mumbai under the ‘Orchid, The International School’ brand.

The company provides full stack education, content, and technology services to over 900 educational institutions across India through a combination of its own curriculum and a technology platform.

While Navneet and Sequoia have been investors for almost a decade, Sofina came in 2020 with an investment of 199.4 crore. In 2021, SoftBank-backed Unacademy invested 159.9 crore (around $20 million) in the company.

Notably, K12 Techno has recently shut its animation division for “rationalising,” and laid off 50 employees in the process.

It also operates a business-to-business (B2B) vertical, Lets Eduvate, and e-commerce store SparkleBox.

Meanwhile, Kedaara Capital has been active throughout this week. On Monday, it announced an investment of $229 million (around 1,900 crore) in fintech-focussed software-as-a-service (SaaS) company Perfios Software Solutions.

Some of Kedaara’s recent bets include beauty and personal care e-commerce platform Purplle, education-focused lender Avanse Financial Services, dermatology chain Oliva Skin & Hair Clinic, and Oasis Fertility.

The private equity firm raised about $1.1 billion for its third fund in 2021 and has invested about $600 million across six companies so far, leaving about $500 million to be deployed across four to six companies.

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Updated: 15 Sep 2023, 12:43 AM IST

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