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Allen set to take over edtech
Famed Kota Three sources knowledgeable of the development said that DoubtNut, an ed-tech startup that removes doubts, is being acquired by Allen Career Institute. For the coaching institute, this will be their first purchase in the Indian ed-tech market. One of the individuals, who wished to remain anonymous, stated, “Allen is buying Doubtnut in a stock and cash deal, and it seems to be a distress sale as the Peak XV-backed company has failed to score a significant follow on funding after the Series B round.” Allen received a $600 million investment in May 2022 from Bodhi Tree Systems, a joint venture between James Murdoch, the founder and CEO of Lupa Systems, and Uday Shankar, the former president of The Walt Disney Company Asia Pacific.
It’s important to note that Lupa Systems has already made investments in Harappa Education and Doubtnut, two Indian tech businesses. The investing company also has stock in VerSe Innovation, the parent company of DailyHunt. Previously, the internet behemoth Byju and Doubtnut held purchase talks and raised a total of approximately $50 million in fundraising. However, disagreements over valuation prevented the deal from closing. According to sources, there would be a minor amount of cash involved in the deal, but mostly shares.
According to an additional insider, “the company has been looking into consolidation opportunities for the past few quarters due to its inability to figure out a business model and lack of monetisation.” In April of this year, the company raised $2.5 million through convertible notes from its current backers, following its most recent equity round in February of 2021. According to individuals close to Entrackr, DoubtNut was also in takeover negotiations with a few other businesses. Tanushree Nagori, a co-founder of the business, refuted this in an April interview with Entrackr. Nagori, Allen, and Peak XV did not respond to requests for comment right away. In FY22, Doubtnut earned Rs 10 crore while spending Rs 194 crore.