Vedantu raises $100 mn in funding from ABC World Asia, others; valuation at $1 bn

Vedantu on Wednesday said it has raised USD 100 million (about Rs 742 crore) in funding led by Singapore-based impact investing fund ABC World Asia, placing the online live tutoring platform in the coveted unicorn club.

The Series E round also saw participation from existing investors - Coatue, Tiger Global, GGV Capital, Westbridge among others, a statement said.

"With this round of funding, Vedantu's valuation is at USD 1 billion, and it underlines its status as the largest K-12 LIVE online tutoring company in India...Vedantu continues its run of successes by joining the USD 1 billion club with this latest round, which will close over the next few weeks, with more investors joining in subsequent tranches," it added.

Vedantu started offering live online classes in 2014, and some of its innovations have been granted patents in the US.

It offers tutoring courses to students (aged 3-18 years) and preparation for competitive exams such as IIT-JEE, NEET, Commerce, CBSE, ICSE, and state exams such as Maharashtra boards. Through 'SuperKids', it offers extracurricular classes like English speaking, reading, and coding.

Vedantu looks to continue to innovate further on the live teaching format and penetrate deeper in the K-12 segment by reaching more students, the statement said.

The funds will be primarily used to strengthen product engineering functions as well as expanding into newer categories through both organic and inorganic routes, it added.

In July last year, Vedantu had announced a USD 100 million (about Rs 752 crore) fundraise that had pushed its valuation to USD 600 million.

"We will continue to innovate to reach as many students as possible and create 10x better experiences and outcomes for every child at Vedantu. 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," Vedantu CEO and co-founder Vamsi Krishna said.

He added that education has a long cycle, and changes take time to manifest.

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"Seeing any significant change requires patience and the tenacity to sustain long term. With that in mind, we want to create a company that outlasts our lives and continues to innovate for decades to come," he added.

The edtech space has seen strong growth globally, including in India, with the COVID-19 pandemic serving as an inflection point. Many offline classes went online to ensure continuity of education while adhering to social distancing norms.

Vedantu rival Byju's - which is estimated to have raised over USD 1.5 billion since April last year in multiple tranches - has been on an acquisition spree to bolster its presence in the global edtech space, buying out companies like WhiteHat Jr, Epic, Aakash Educational Services Ltd (AESL), Great Learning and Gradeup.

While reports had emerged in August this year that Byju's was in talks to acquire Vedantu as well, Vedantu had termed these reports as "false" and said it was not "remotely considering anything of this sort".

More than one million students attend live classes every month on Vedantu's platform and more than 35 million users every month from over 10,000 cities and 50-plus countries. Vedantu catered to over 2 lakh paying students last year, a 300 per cent growth over the previous year.

Sugandhi Matta, Chief Impact Officer at ABC World Asia, said online education in India 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. Vedantu's innovative platform empowers teachers who have delivered excellent results to offer personalised education to many students at once, creating the potential for impact at scale," Matta added.

The Rainmaker Group acted as the exclusive financial advisor to Vedantu on their fundraising.