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Classplus buys out Matrix and Pivot Ventures’ stake in Testbook

B2B edtech company Classplus has made its maiden investment by acquiring a minority stake in Testbook via a secondary transaction. With this deal, Classplus has bought out shares of the Mumbai-based companyu2019s current investors Matrix and Pivot Ventures.<br><br>

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Classplus buys out Matrix and Pivot Ventures’ stake in Testbook

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  1. Classplus buys out Matrix and PivotVentures’stake in Testbook B2BedtechcompanyClassplushasforayedintotheconsumersegmentbyacquiringaminoritystakeinTestbookviaasecondarytransaction.ThisisamaideninvestmentbytheNoida-basedfirmintotheexampreparationstartup. Withthisinvestment,ClassplushasboughtoutsharesofcurrentinvestorsMatrixandPivotVentures. TheboardatClassplushaspassedaspecialresolutiontoallot1,695SeriesEpreferencesharestoMatrixPartnersandPivotVenturesatanissuepriceofRs4,00,013pershareaggregatinguptoRs67.80croreagainst7,867sharesofTestbookheldbythem,accordingtothecompany’sregulatoryfilingwiththeRoC. Followingthistransaction,MatrixPartnerswillowna1.65%stakeinClassplus.AccordingtoFintrackr’sestimates,Matrixownedabout34%stakeinTestbookuntilitslastfinancinground. Eight-year-oldTestbookhelpsstudentsfromsmallercitiesprepareforgovernmentexamsthroughliveclasses,mocktestsandquizzeswhileClassplusisasoftware

  2. platformthatallowseducatorsandcontentcreatorstobuildtheironlinepresence,digitisetheirofflinetuitioncentersandselltheircoursesonline.platformthatallowseducatorsandcontentcreatorstobuildtheironlinepresence,digitisetheirofflinetuitioncentersandselltheircoursesonline. AccordingtoEntrackrsources,theinvestmentisstrategicinnatureandClassplusmayfold-upTestbookcompletelyintothecompanyinthefuture.“ClasspluswillevaluatetoacquiremorestakesinTestbookifthecompanydemonstratesdesiredperformance.It’salsolikelytoputsomeprimarycapitalinTestbookinthecomingmonths,”saidoneofthesourcesrequestinganonymityasthispersonisn’tauthorizedtospeaktothemedia. It’sworthnotingthatTestbookrequiresprimarycapitaltogrowfurtherasithasbeenfindingittoughtoraiseexternalcapital.It’soneoftherareVC-backededtechstartupswhichdidn’traisecapitalinthelasttwo-and-a-halfyears.Sofar,ithasraised around$13millionfromIronPillar,Matrixandaclutchofangelinvestors. QueriessenttoClassplusandTestbookdidn’telicitanyimmediateresponse.Wewillupdatethestoryasandwhentheyrespond. Testbookprimarilymakesmoneyfromsellingonlinecoursesandmocktestpapersforcompetitiveexams.WhilethecompanyisyettofileFY22financialnumbers,itsrevenuefromoperationssurged85.8%toRs22.3croreinFY21fromRs12croreinFY20,asperFintrackr’sanalysis.Significantly,thecompany’slossessoared2XtoRs32.5croreinFY21fromRs15.3croreintheprecedingfiscalyear(FY20). Asofnow,Classplushasraised$160millionacrossseveralroundsandwasvaluedataround$600millioninitslastround.ItsinvestorsincludeAlphaWave,TigerGlobal,SequoiaCapital’sSurge,TimesInternet,BlumeandGSVVentures. Giventheongoinglayoffsandshutdowns,especiallyintheedtechspace,thestartupecosystemmayseemoresuchdealsinthecomingmonths.Aspermediareports,almostalledtechstartupshavefiredasignificantnumberofemployeesinthepastfewmonths.ThelistincludesByju’s,WhiteHatJr,Toppr,Unacademy,Vedantu,LEAD,andEruditus,whileRonnieScrewvala-backedLidoandAlphaWave-backedUdayyshutdowntheiroperationsduetolackoffunds.

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