Business

Brazilian edtech Descomplica raises a BRL 450 million Series E round led by SoftBank

The largest investment round ever received by an edtech in Latin America will back the startup to make more acquisitions and grow its graduation unit, Faculdade Descomplica

Headquarters of the startup Descomplica in Rio de Janeiro, Brazil
Descomplica HQ in Rio de Janeiro. Photo: Descomplica/ Courtesy

Well known for its college-prep courses, Brazilian edtech Descomplica announced on Thursday it has raised BRL 450 million in a new investment round, showing how online education in Brazil has been catching the eyes of investors as the COVID-19 pandemic has spurred an already booming trend.

Led by Invus Group and SoftBank, the new investment round is the largest ever received by an edtech in Latin America and it will support the startup’s graduation unit, Faculdade Descomplica, as well as acquisitions and development of new products, the company said in a memo.

By 2018, date of the last investment received by the company, funding from investors in the company accounted for US$ 32.5 million.

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“We are excited to support Descomplica, which brings quality education to the mass market, powered by technology, to millions of Brazilians,” stated Paulo Passoni, managing investment partner at SoftBank.

Valor Capital; Península round, from the family of businessman Abilio Diniz; Chan Zuckerberg Initiative, an organization created by Facebook’s founder and his wife Priscilla Chan; and U2 guitarist The Edge also take part in the Series E round.

“We want to build the greatest college in Brazil, quickly reaching 1 million students in the 100% digital model,” said the president and founder of Descomplica, Marco Fisbhen. Currently, the largest group of higher education in the country is Kroton, belonging to the Cogna group.

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Created in 2011 focusing on prep courses for college and public tenders, the platform started about a year ago to offer postgraduate programs. Currently, it claims to have about 5 million monthly users.

With social isolation measures taken to halt the advance of the pandemic, and a resulting boost in the demand for remote education, Descomplica also entered the graduation sector with its Faculdade Descomplica unit, with programs in Accounting, Business Administration, HR Technology and Pedagogy.

Part of the funds raised will support the launch of 18 courses in 2021 and another 15 next year, focusing on the areas of management and technology, in addition to increasing the number of postgraduate programs from 300 to 500. According to Daniel Pedrino, CEO at the Faculdade Descomplica unit, the edtech’s postgraduate programs have grown over 10 times and has 30 thousand students.

“Descomplica has been changing the education landscape in Brazil for years and we are very committed to its growth in the coming years. We believe in a complete life cycle investment strategy and we have supported the company since the beginning,” said Antoine Colaço, managing partner of Valor Capital Group.

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In addition, Descomplica is likely to expand its team of teachers and tech employees, which doubled last year and reached 600 people, with the opening of 100 vacancies. “I wouldn’t be alarmed if we reach 1,000 employees by the end of the year,” said Fisbhen.

Descomplica also plans to dedicate part of the funds to acquisitions of technology services businesses. A possible IPO, according to the exec, is off the table for now, as the new funds raised would support the business for a few more years. “But it is natural that, while the company is growing, that in a few years it may be listed,” Fisbhen added.

The announcement shows how education startups are quickly becoming targets of bigger bets from institutional investors, while traditional and Bovespa-listed education companies have seen the fall of their shares, as the return of face-to-face classes is still uncertain.

Translated and co-written by LABS