Equanimity Investments Secures Triple-Digit IRR, Full Cash Exit as CollegeDekho Acquires Prepbytes
At Equanimity Investments, we have developed our SPEED framework to ensure that we always have an eye on exits. Staying true to our Portfolio Design principle of the framework, we are extremely pleased to announce our third full exit at Equanimity within a year. This is in sharp contrast to the fact that exits have been typically hard to come by in the Indian Startup Ecosystem. Prepbytes, an online platform helping college students to learn coding in a personalized manner under the guidance of expert mentors, making them more fit & prepared for the ever-evolving IT/Software/Internet industry, has been acquired by CollegeDekho.
We first met Mamta and Aditya, co-founders of Prepbytes, in July 2020. Engineers by qualification, the founders worked in software development right out of college. In her spare time, Mamta mentored students from tier 2/3 colleges who aspired to land product development jobs. The problem statement stared her right in the face as she realised that while 1.5 million students graduated from engineering colleges in India every year, 90% of them had no clue about what courses they should pursue or what resources they needed to use to get the jobs they so desired.
Mamta reached out to Aditya with the idea to start Prepbytes and become the one-stop destination for students to learn coding and land the right jobs. The founders built an in-house coding platform where students could code for free, building a community of 100K+ students, who could potentially enrol in the company’s course offerings.
The company decided to address a very important problem in a large market by helping second, third, and final-year engineering students be employable by the time they graduated college. We were impressed by the founders’ vision and passion to produce quality coders and decided to partner with them in February 2021, as they realised their goals.
Staying true to our tenets and engaging with our portfolio companies, we actively worked with the founders to strategize effectively and charted three additional revenue streams, in addition to their Direct-to-Student offering. Over the coming year, Prepbytes would go on to launch the Elevation Academy, an offering where they would execute an Income Sharing Agreement (ISA) with where students would pay a nominal fee upfront and share a portion of their salaries once they started their jobs; partner with colleges to conduct courses and webinars to engage a larger volume of potential customers, and work with corporates to provide them with hiring tests and recruitments, thereby also building a pipeline of potential clients who could absorb the coders graduating from Prepbytes’ courses.
Our SPEED framework ensures that we remain deeply involved with our companies, beyond the boardroom. Our team interacted with the founders every week to incorporate systems and processes in place to institutionalise the business from the get-go. We worked closely with the company to engage a CFO service to build the foundational pillars of corporate reporting, governance, and compliances. Additionally, we dedicated resources and conducted deep research to aptly identify the opportunities and pitfalls of the ISA model before the company ventured into the space. We identified issues such as legal enforceability, financing solutions, and course completion as key concerns. This helped the company launch an experimental batch in August 2021, which provided them with an array of learnings to help tweak their model to Indian realities.
As we were evaluating various funding options with financial and strategic investors for the company’s next leg of growth, we saw a good fit with Collegedekho, which is a discovery platform helping students find the right colleges. All stakeholders saw tremendous synergies between the two brands. CollegeDekho brought a formidable network and market understanding while Prepbytes brought content development expertise and a wide array of offerings. Seeing the benefits of a partnership where Prepbytes’ brand would live on and the team would find a good home, we signed off on the acquisition.
We are extremely excited for what the future holds for Prepbytes and wish the team luck in pursuing their aspirations and achieving tremendous success in the times to come.