Vedantu Becomes Unicorn: $100 Million Funding for Indian EdTech Platform

Vedantu Achieves Unicorn Status with $100 Million Funding

The online learning platform, Vedantu, has secured $100 million in a new funding round. This achievement positions the company as the latest Indian startup to reach a $1 billion valuation, also known as unicorn status, following a period of substantial growth.

Recent Developments and Funding Details

Vedantu recently addressed and dismissed speculation regarding a potential acquisition by Byju’s. On Wednesday, the company announced the completion of its Series E financing round, totaling $100 million. This investment has increased the company’s valuation from approximately $275 million at the beginning of last year to $1 billion.

The funding round was spearheaded by ABC World Asia, a Singapore-based private equity firm backed by Temasek. Existing investors, including Coatue Management, Tiger Global, GGV Capital, and WestBridge, also made significant contributions to the round.

Vedantu’s Platform and Reach

Vedantu provides live, interactive educational courses for students in grades six through twelve. The platform allows students to participate actively in lessons by responding to questions via smartphone touchscreens or desktop clicks.

Furthermore, Vedantu has established partnerships with Airtel and Tata Sky. These collaborations enable the delivery of its courses through their satellite cable television services. The company also offers a comprehensive library of free lessons to students.

Growth and Future Projections

Currently, Vedantu boasts over 35 million monthly active users. As of last year, the platform had 200,000 paying subscribers. Vamsi Krishna, co-founder and CEO of Vedantu, anticipates this number will more than double in the current year.

The startup’s revenue has experienced over a fourfold increase in the past year, with an annual run rate of approximately $65 million.

The Indian Edtech Landscape

India possesses the world’s largest school-age population, exceeding 250 million individuals. Historically, families throughout the country have prioritized education as a means of social and economic advancement.

However, access to quality and affordable education remains a significant challenge for many students, particularly those in smaller cities and towns. Online education platforms are actively working to address these issues.

Competitive Positioning

Vedantu operates in a competitive market alongside Unacademy and Byju’s, the most highly valued startup in India. However, Vedantu distinguishes itself through a reduced emphasis on marketing and a less frequent need for new funding rounds.

Some industry observers have noted that Vedantu adopts a less aggressive approach than its competitors, a characteristic often viewed positively.

Strategic Financial Approach

Krishna explained that Vedantu’s conservative fundraising strategy is driven by necessity. The company still has a substantial portion of the $100 million raised in its previous funding round remaining.

With the new capital, Vedantu aims to achieve profitability within the next two years.

Expansion Plans and Market Opportunity

Vedantu intends to utilize the new funds to broaden its offerings for students in grades one through five. The company is also exploring opportunities for international expansion and potential mergers and acquisitions, according to Krishna.

The company has already organically attracted users in over 47 countries and is evaluating potential formal market entries.

Edtech Market Growth in India

Analysts at Bernstein project the Indian edtech market to reach a value of $126 billion by next year, a significant increase from $63 billion in 2016. Spending on K12 education is projected to reach $55 billion by 2022, while post-K12 education is expected to reach $71 billion.

The COVID-19 pandemic led to a substantial increase in edtech users in India, with total users doubling from 45 million in 2019 to 90 million in April 2020.

Investor Perspective

Sugandhi Matta, chief impact officer at ABC World Asia, stated that Vedantu aligns with their investment focus on improving access to quality education and leveraging digital technology for positive social impact.

Matta highlighted the potential of online education to expand access to education for underserved communities and reach the next half-billion income group in India.

“Vedantu’s innovative platform empowers teachers to deliver personalized education to numerous students simultaneously, creating the potential for widespread impact. We are excited to partner with Vamsi and the Vedantu team as they continue to grow and improve learning outcomes for students in India.”