Edtech startup Vedantu, focussed on live online tutoring, has confirmed that it has raised $100 million (Rs 742.2 crore) in Series E funding and has become the 5th Indian edtech startup to become a unicorn following a year of strong growth.
Singapore’s ABC World Asia led Vedantu's $100 million Series E funding round
India is home to the largest school-age population in the world (over 250 million individuals). Families across the nation have historically invested heavily in their children’s education to advance in life. Now with new edtech startups coming and the overall startup sector booming, online education is now among industries benefiting because global investors are boosting their bets on India's startup ecosystem. Now an Edtech firm called Vedantu, which offers online tutoring, is the latest Indian startup to be valued over a billion dollars.
From L to R Anand Prakash, Pulkit Jain and Vamsi Krishna- Vedantu founders
Founded by Vamsi Krishna, Pulkit Jain, Anand Prakash, and Saurabh Saxena in 2014, Vedantu offers live classes to students augmenting school lessons or helping them to prepare for India’s competitive engineering and medical school entrance exams. The Bangalore-based startup becomes the 5th Indian edtech unicorn (unicorn term is used to refer to privately-held firms valued at a billion dollar and more) after Byju’s, Unacademy, UpGrad and Eruditus, and the 3rd to reach the milestone in 2021. Both UpGrad and Eruditus also entered the Unicorn club in 2021. It is also the 28th unicorn to emerge out of India in 2021, amidst the funding boom.
Vedantu said on September 29, 2021 that it has raised $100 million in its Series E round of funding at a valuation of $1 billion. The round was led by Singapore-headquartered and Temasek-backed private equity firm ABC World Asia. Existing investors such as Coatue, Tiger Global, GGV Capital and Westbridge also participated in the unicorn round of funding.
"In India, online education has the potential to extend the scope of ‘Right to Education’ to students in the underserved community and capture the ‘Next Half Billion’ income group, representing over half of the country’s student population. With EdTech experiencing meteoric growth in India, Vedantu as the pioneer and category creator in LIVE online tutoring is driving the tectonic shift towards online learning,” Sugandhi Matta, Chief Impact Officer, ABC World Asia, said. Vedantu plans to use the funds to fortify its technology and expand into newer categories, including via acquisitions.
How does it fare against its competition?
Unacademy and Byju’s valuations have skyrocketed in the last 18 months. Unacademy’s valuation has gone from $500 million in February 2020 to $3.4 billion currently, while Byju’s valuation has gone from $5 billion to $16.5 billion in the same period. CEO Vamsi Krishna in conversation with Moneycontrol said that because there are enough students, India can have 3-4 large ed-tech players. The Bangalore based startup says it has amassed over 35 million monthly active users, and as of last year, had 200,000 paying customers. It currently has an annual revenue rate of $65 million, or about $5.4 million revenue a month. Vedantu earlier said it was profitable on a contribution margin level, which means that its revenues cover all its variable costs, a step towards eventual profits.