Uchi Group, the publisher of Russia’s leading online education platform for school pupils, has agreed an investment of at least 3.75 billion rubles ($50 million at the current exchange rate) from Mail.Ru. The LSE-listed group will receive a 25% stake in exchange for this amount, while the RDIF, Russia’s sovereign wealth fund, and the Russia-China Investment Fund will become minority shareholders under undisclosed terms.
The deal is expected to be closed by the end of this year. Mail.Ru will have the option to increase its stake to 49.5% at the end of 2021, “on a path to [taking control of the company] in 2022-23,” as stated by the group.
The amount raised is considerable by Russian standards. It will enable Uchi Group to develop further its UCHi.RU platform and expand its product range, including new interactive tools and educational products.
Uchi Group also has plans to expand abroad “in BRICS countries, the USA, Vietnam and other international markets,” as stated by the RDIF.
Traffic boost amid the pandemic
With more than 40 million visits in November 2020, UCHi.RU attracts essentially (97.7%) Russian users, but ranks among the most popular online education platforms in the world, according to SimilarWeb. The site is used by more than 8 million students, 350,000 lecturers and 35,000 schools nationwide, according to data cited by the RDIF. Average visit duration on the platform reaches 18 minutes, thanks to diversified content including more than 30,000 gamified exercises.
UCHi.RU’s traffic was boosted by the pandemic this year. The platform’s response to the lockdown was to increase access to its solutions and make available rapidly new e-learning products for free.
RDIF CEO Kirill Dmitriev noted that “thanks to UCHi.RU, millions of Russian schoolchildren can continue their education without leaving their homes and putting their health at risk.” He presented the investment in the platform as part of his fund’s “active work on projects aimed at defeating the virus.”
In 2019, Uchi Group generated 981 million rubles in revenues (around $15 million at the average exchange rate of the year) and 295.6 million rubles in net profit ($4.5 million). Revenues could jump to some 3 billion rubles this year (around $40 million), reports Interfax.
Founded in 2012, Uchi Group is owned by nine individual shareholders, according to the SPARK-Interfax company database. Among these individuals are Ekaterina Kashirskaya (who owned a 4.85% stake before the transaction), Ivan Kolomoets (17.11%), Evgeny Milyutin (17.11%), former Merlion President Alexey Sonka (20.17%), Andrey Suzdaltsev (15.37%), Yuri Virovets (4.86%), Evgeny Vorontsov (0.8%), former UCHi.RU CEO Ekaterina Zotova (2.3%) and Vladimir Zubrilin (17.43%).
New investment playing ground for Mail.Ru
So far Mail.Ru’s investment in the field of online education essentially focused on IT skills. The group’s portfolio of edtech companies includes GeekBrains, an online university acquired in 2016; online programming school Algoritmika, of which the group bought a stake in 2019; SkillFactory, a data science education startup in which Mail.Ru invested in July 2020; and Skillbox, an e-learning platform for digital and IT specialties in which Mail.Ru invested in 2019 and in 2020.
The deal with Uchi Group marks Mail.Ru’s second edtech investment outside the IT training space. The first one took place in October this year, when the group purchased a 45% stake in exam preparation platform Tetrika.
“We are actively developing the education ecosystem of Mail.ru Group and expanding the range of services helping people – from pre-schoolers to teens and adults – to study and improve their skills,” stated Boris Dobrodeev, CEO of Mail.ru Group, commenting on the investment in UCHi.RU.
