Indian edtech startup Vedantu has become the fifth edtech unicorn in India after receiving a USD 100 million check from Temasek-backed impact investment firm ABC World Asia. The funding round also saw participation from existing investors, including Coatue Management, Tiger Global, GGV Capital, and WestBridge Capital.
Vedantu was valued at around USD 600 million mid last year when it raised USD 100 million from Coatue. The recent capital infusion has made the Bengaluru-based startup the 28th billion-dollar company in India this year.
The world’s second-most populous country got its first edtech unicorn in Byju’s in 2018. After the COVID-19 pandemic made education technology companies indispensable last year, India saw Unacademy, Eruditus, and upGrad join the coveted unicorn club.
Founded in 2014 by Vamsi Krishna, Anand Prakash, and Pulkit Jain, Vedantu is an online tutoring startup that provides live classes to K-12 students. It currently serves 35 million students and expects the number of paid students to go up to half a million from 200,000. The company claims to have reached an annualized revenue run rate of USD 65 million—three times more than last year.
Vedantu’s current funding round has not yet closed, and more investors may join its cap table. The company plans to use the recent funding to propel the growth of its core business. Its strategy is to go deeper into the Indian market—targeting students from smaller towns by adding regional languages in its coaching classes—and expand its operations overseas in the Gulf Cooperation Council, Southeast Asia, Western Europe, the US, and Canada.
“International expansion in K-12 is something we are going to look aggressively towards in the next 15 months. We have students studying from 48 countries as of today. This has largely been organic,” Krishna, co-founder and CEO of Vedantu told local mediaEconomic Times in an interview. “Going forward, we intend to have a dedicated plan for international growth.”
Its bigger rival Byju’s—India’s most valued startup at USD 16.5 billion—has been aggressively expanding its footprint in the US and is using it as a launchpad to enter other international markets.
Furthermore, Vedantu will be adding new tutoring solutions for grades 1–5. It will also use the fresh capital to strengthen product engineering functions. The company’s key focus, according to Vamsi, remains “building a long-term sustainable company.” The edtech major is looking to go public over the next two and a half years.
Last month, local media Entrackr reported Byju’s was looking to buy Vedantu for USD 800 million. Vedantu’s Krishna has denied the claims, saying they are “not even remotely considering anything of this sort.”
The development comes at a time when Byju’s has hastened its IPO plans and joined a long list of high-profile companies like hospitality chain Oyo, e-commerce major Flipkart, and ride-hailing giant Ola that are looking to go public next year.
As such, edtech has remained one of the most funded sectors since last year. In 2020, investors pumped in USD 2.2 billion last year in the sector. Riding the funding wave, edtech firms raised USD 1.9 billion between January and August 3 this year. Edtech is set to become a USD 30 billion market over the next decade, up from the current USD 700–800 million.