Indian e-learning platform Vedantu becomes a unicorn with $ 100 million funding
Online learning platform Vedantu raised $ 100 million in another round of funding and became the latest Indian startup to become a unicorn after a year of strong growth.
Vedantu, who last month refuted rumors he was considering a sale to Byju’s, said on Wednesday it had raised $ 100 million in its Series E funding round that valued it at $ 1 billion, down from around $ 275 million. dollars at the start of last year.
The round was led by Singapore-based private equity firm ABC World Asia. Existing investors Coatue Management, Tiger Global, GGV Capital and WestBridge also “heavily” participated in the round, the startup said.
Vedantu offers live and interactive lessons for students in grades 6-12. Students who have registered for the interactive sessions touch their smartphone screen or click on the desk to answer questions.
The startup, which also has partnerships with Airtel and Tata Sky to deliver its courses on their respective satellite TVs, offers a large library of courses at no cost to students.
The Bangalore-based startup claims to have amassed more than 35 million monthly active users, and last year it had 200,000 paying customers. That paid subscriber figure is expected to more than double this year, said Vamsi Krishna, co-founder and CEO of Vedantu, in an interview with TechCrunch. The startup’s revenue has also grown more than 4 times over the past year, and the current annual execution rate is around $ 65 million, he said.
India is home to the largest school-age population in the world (over 250 million people). Families across the country have historically invested heavily in the education of their children to advance in life.
But the quality of education and its affordability are two major challenges that millions of students, especially those living in small towns and villages, have always had to face. These are also the two major challenges that online education platforms are trying to meet.
Vedantu competes with Unacademy and Byju’s, which is the country’s most valued startup. But unlike its rivals, the startup focuses a lot less on marketing and doesn’t go through a new cycle every few months. Some industry executives have said Vedantu is not as aggressive as its rivals – although many saw it as a compliment.
Krishna said that Vedantu did not collect so much money because he does not need it. He said the startup still had to spend about half of the $ 100 million it raised in its previous funding round last year. He said that with the new funds, Vedantu will try to become profitable over the next two years.
Co-founders of Vedantu. (Vedantou)
As to the comparison with other companies, Krishna said, “There is no right or wrong way to operate.”
“You have to look at our genesis. We were already running a successful educational enterprise. The reason we started Vedantu was to solve the challenges that teachers and students face. Having spent 16 years now in education, we know that making a meaningful impact takes time. Our focus has therefore always been on the long term, ”he said.
“As long as we are able to innovate for our students and create value, nothing can stop you from building a long-term sustainable business. You cannot afford to be distracted by what other people are doing and growing their income or valuation. That’s what we’ve been telling our team from the start, ”he said.
Vedantu plans to deploy the fresh funds to expand its offerings for students in grades 1 through 5. The startup is also exploring international expansion and considering merger and acquisition opportunities, Krishna said. (Vedantu has organically amassed some users in over 47 additional countries. It is starting to assess where it can officially launch its offerings.)
At stake is a booming edtech market in India that Bernstein analysts estimate at $ 126 billion by next year, up from $ 63 billion in 2016. “Spending on the K12 education market expected to be $ 55 billion by 2022. Post K12 education market at $ 71 billion. India’s edtech user base has seen a sharp increase due to Covid: the total number of users has doubled from 45 million in 2019 to 90 million in April 20, ”they wrote in a report to clients earlier this month.
In a statement, Sugandhi Matta, Chief Impact Officer at ABC World Asia, said, “Vedantu embodies our investment themes of providing better access to quality education and using digital technology to improve lives and means. subsistence. In India, online education has the potential to extend the reach of the ‘right to education’ to students in the underserved community and to capture the ‘next half billion’ income group, representing over half of the country’s student population. “
“With edtech experiencing rapid growth in India, Vedantu, as a pioneer and category creator in LIVE online tutoring, is driving the tectonic shift towards online learning. Vedantu’s innovative platform empowers teachers who have provided excellent results in offering personalized instruction to many students at once, creating the potential for large-scale impact.We are delighted to partner with Vamsi and the Vedantu team as they continue to expand and shape learning outcomes for students in India. ”