What does an entrepreneur do when at mid-career he’s sold his company for $600 million, leaving him and his co-founders a tad richer? What’s there to look forward to next? What does one do with this kind of wealth, earned in a single shot?
Mohan Lakhamraju, 44, CEO of Great Learning, intends to not waver from his set path and double down on what he’s been doing for the last 10-12 years. In one of the biggest deals in the space, Bengaluru-headquartered K-12 edtech
giant Byju’s made a dramatic entry into the higher education space by buying Great Learning last week. The deal allows Great Learning’s team to grow its business the way it envisages without all the incumbent headaches of raising funds.
It was once the pandemic broke out that Lakhamraju and his team realised that this was the moment to expand and grow into new business segments. The company was doing well, growing and earning a small surplus but the money wasn’t enough to get into all the opportunities they could see emerging. Like many others in the space, they started looking to raise around $60 million sometime in 2020.
But even as they got started on the fundraising exercise, a couple of players evinced interest from a strategic point of view. Of these, the best fit in terms of values, thinking and synergies was with Byjus’s and the deal was struck. Besides the $600 million to be paid in tranches and based on certain time-bound targets being met, Byju’s will be investing $400 million in the business for the team to expand and grow its various verticals.
The first vertical is old hat for the founders, one in which they already have the first-mover advantage: Professional upskilling. Back in 2013, Great Learning introduced courses on its platform that allowed professionals to stay relevant in their jobs and to power ahead their careers through new learning and skills. These courses then were in the areas of business, technology and data sciences. Now, the company will widen the range of subjects and expand in new geographies with the aim of earning half its revenue from overseas markets such as the US and South Africa.
The second area is to offer online and blended degree programmes to students out of high school and college graduates in partnership with Indian and foreign universities. This is a new area into which the company has forayed, but has aggressive expansion plans.
A third thrust area is to offer tech assistance to colleges, universities and existing brick-and-mortar institutions to use their Olympus Digital Campus (ODC) platform to do their teaching better. “A lot of colleges in India don’t have the adequate infrastructure and tools to teach their students online. Our digital learning platform helps fill the gap,” explains Lakhamraju. The platform is now offering support to around 250 such colleges including Jawaharlal Nehru Technological University (JNTU) Kakinada, KLE group of institutions, Cambridge group of institutions and Teerthanker Mahaveer University, among others. Most Indian institutions and many in similar developing countries are heavily “underinvested” when it comes to technology and this gaping hole has been highlighted by the pandemic.
But the deal with Byju’s is “far from a sell-out” as far as the Great Learning trio is concerned. In fact, they will be more vested in the business than ever, firing on all cylinders and taking each of these verticals on to a new trajectory, sans the headaches of fundraising since they are now under a cash-rich umbrella. What makes the recent acquisition or strategic alliance interesting is that the employees of the company — several of whom have been around since inception and own 25 per cent of it — will between them make $100 million, leaving over 100 of the longer serving employees a lot richer, something Lakhamraju believes is largely “unheard of in the Indian start-up ecosystem”.
This has been one of the biggest rewards of the acquisition as far as the founders are concerned. Lakhamraju said when he started out, he genuinely believed there is nothing he couldn’t do by himself, if he put in hard work and put his mind to it.
Over the years, he learned that there is nothing substantial he could achieve by himself. “It is only by surrounding myself with capable, committed, trusted and empowered colleagues that I can do anything worthwhile,” he pointed out, adding that it’s been both a humbling and liberating realisation. He also feels that as a leader, one of the most powerful ways to gain trust and commitment from the team is to make himself vulnerable, openly share the challenges and the mistakes made. “It is tempting to project an aura of strength and of having all the answers but I find that exposing vulnerability can also be quite effective,” he adds.
With regards to education, he and his co-founders also had another “aha” moment: You cannot make learning outcomes happen by throwing money at it. You can make more ecommerce or more food ordering or more rides or payments happen by giving cashbacks, discounts or otherwise throwing money at it. “When it comes to learning outcomes, money cannot short-circuit or accelerate the process,” he added. Good content, faculty, mentorship, a robust tech platform, good assessments and projects and, most importantly, a learner engaging deeply with all of these things — that’s what enables learning outcomes.
As the founders who may have hit the jackpot pretty early in their careers will probably soon realise, there are many things in life money can’t buy.
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