Vedantu turns unicorn amidst edtech battle in India

Education technology (edtech) company Vedantu on Wednesday said that it has raised $100 million in a Series E funding round led by Singapore-based impact investing fund ABC World Asia. Existing investors, including Coatue, Tiger Global, GGV Capital, Westbridge, and others also participated in the latest round—which valued the company at $1 billion.

The company will utilise the funds to strengthen its product engineering functions as well as expanding into newer categories through both organic and inorganic routes.

“Back in 2014, when we held our first live class, nobody believed this would work. It is super satisfying to see this format becoming mainstream and Vedantu leading the way in innovative online delivery experiences,” Vamsi Krishna, CEO, and co-founder, Vedantu said in a statement, adding that, "even though we have made quality teaching affordable and enabled it to reach masses since our inception, it’s still very early, much more transformation is still to come which we wish to drive forth,” he added.

Vedantu competes with larger rivals Byju’s and Unacademy in the live online tutoring space for kindergarten to 12th grade (K-12). Vedantu—which also has a presence in the test prep segment including engineering, medical examinations and others—claims that over 35 million users access its content through app and web for free. The company said that it catered to over two lakh paying students last year—a 300% growth over the previous year.

Edtech companies in the country have been ruling the roost in raising top dollars from investors since the Covid-19 pandemic struck early last year. That trend seems to be on an upward swing this year as well. Between January and August 2021, edtech players have garnered a whopping $3.81 billion in funding—nearly a four-fold jump from $971.5 million in funding during the same period last year—according to data from analytics firm Tracxn.

“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,” said Sugandhi Matta, chief impact officer, ABC World Asia.

Vedantu is the third edtech firm this year to attain unicorn status. Before that, the space also saw the addition of two new edtech startups upGrad and Eruditus to India’s coveted unicorn club—which are privately-held companies that have reached a valuation of $1 billion or more. Last month, upGrad raised a total of $185 million valuing the company at $1.2 billion, followed by Eruditus which raised $650 million, valuing the startup at $3.2 billion.

Besides the billion-dollar fundraise, the edtech space also witnessed some key consolidations both in the offline and online space this year. In April, Byju’s acquired Blackstone-backed Aakash Educational Services for nearly $1 billion—making it the biggest in the Indian edtech space. Aakash Educational Services is one of India’s leading players in the brick-and-mortar test prep space and claims to have over 200 coaching centres across the country. Byju’s also made key acquisitions such as U.S.-based Epic—an online library for kids aged 12 and under—for $500 million, followed by Singapore-based Great Learning—an online professional and higher education company—for $600 million and Mumbai-based Toppr, an after-school learning platform for $150 million.