Recently, Allen Career Institute is in the news as they are selling a big part of their business.
Let’s go through the details of the deal:
Kota-famed Allen Career Institute set to raise funds at over $1 Bn valuation
Offline coaching institutes have been witnessing keen interest from cash-rich edtech companies and this was validated with the acquisition of Aakash Educational Services by Byju’s in a deal of nearly 1 billion $. And this isn’t going to be an isolated incident. According to Entrackr’s sources, several top-notch offline institutes continue to garner interest from EdTech companies and investors.
One such firm is Kota-famed Allen Career Institute. Allen is in late-stage talks to raise a large round from Lupa Systems — investment firm of James Murdoch, according to two people aware of the details of the deal.
“Lupa is likely to pick 30-35% stake in Allen at a valuation close to $1.2 billion,” said one of the people requesting anonymity. “The terms of the deal are finalised and the transaction could be announced in a few weeks from now,” the person added.
While four companies from the EdTech space had attained unicorn status—valued at $1 billion or more—since 2021, Allen would probably be the first unicorn from the offline coaching space. “Consistent growth in scale with a strong collection in revenue has driven Lupa’s interest in Allen,” said the second person, also requesting anonymity.
Our Analysis from this deal and consequences of this deal on courses and students of Allen:
1. Allen is going to focus more on raising the revenue after the deal to make it as much profit as possible for which they will start opening a lot of new centres across the country. This may lead to dilution of quality at their existing centres as some experienced teachers will be moved to take care of the new centres. We have seen the same thing in Akash Institute after their deal with Byjus.
2. In recent times, Akash has been hiring a lot of new teachers without much focus on quality to cover the demand of new centres. Similar to this, Allen Career institute may also start recruiting teachers with much less experience and expertise to meet the demand of new centres. Nowadays also, about half of teachers at Allen centres are trainees who have just started their teaching careers.
3. When the focus changes to the revenue side, their courses being offered to JEE and NEET will also get diluted and standardized to meet the needs of medium level students which can make the courses not very beneficial for students having high-rank potentials. The same thing has been seen in Akash institute after their acquisition.
4. For Byjus, Akash institute is another acquisition to just make their brand name more popular and they are milking Akash Institute to the fullest for the same. As the Name of Institute is now hanged to Akash+Byjus too.
Overall, we think this is not a positive change for students and faculty members of Allen Institute. The quality of education at Allen career institute is going to suffer along with thousands of students studying in different centres of Allen.
So true. Allen is hiring low salaried teachers now days and more than half of teachers in kota are having only 4-5 years of experience. Allen has been buying ranks and teachers from last many years and this deal will help them in getting more good ranks and more low salaried teachers to expand buisness across country… * Seriously sad to hear for those who will pay them 1.2lakh tution fee..*