Vedantu raises US$ 100 million from Coatue, valuation doubles to US$ 600 million
- IBEF
- July 17, 2020
Vedantu raised US$ 100 million, as part of its Series D round, which has doubled its valuation to US$ 600 million, making it the second-most valued edtech start-up in India, after Byju’s.
This fund raise was led by New York-based hedge fund Coatue, which has backed Uber, Spotify, Bytedance globally, and has invested in Swiggy and Rebel Foods in India. Other participants in the round included that existing investors such as Tiger Global and GGV Capital. Mr Rahul Kishore, managing director of Coatue will join Vedantu's board.
As the country was facing crisis due to the lockdown imposed by Government as a precautionary step to handle COVID-19, edtech platforms have been benefitted as the classromm teaching was suspended. To fill the gap and help students, Edtech startups stepped in with online classes.
Thus, the investors have also shown an increased interest because of the rise in digitisation of education amidst the pandemic.
In June 2020, Byju’s has raised US$ 100 million from US-based technology investor Bond, at a valuation of US$ 10.5 billion. Earlier, in February, another edtech start-up, Unacademy had raised US$ 110 million from Facebook and General Atlantic valuing it at US$ 510 million.
Venture capital firms (VCs) have shown a clear preference for ed-tech start-ups with US$ 795 million raised compared in first six months of 2020, to US$ 108 million in the year ago period, according to data from Venture Intelligence research.
“Our investment in Vedantu marks our entry into the Indian edtech market. This move underlines our strategy to partner with companies that are strategically positioned for high growth and scale. Online learning adoption in India is at an all-time high setting a new benchmark for the rest of the world," said Coatue’s Mr Kishore.
Vedantu offers live interactive classes to students across grades K1-12, for all major boards and competitive exams like JEE and NEET. In the last few month, Vedantu has added the early learner segment with the launch of its coding program for 6-12 years called Vedantu SuperKids. It also launched a reading programme and plans to add more programmes in this category.
“During lockdown, everyone is talking about live classes and this is the best time for us to drive more adoption and strengthen our brand as the best destination for Live classes," Mr Vamsi Krishna, CEO and co-founder of Vedantu said.
“On top of adding new categories, we will use the funds to invest into content and technology to create the world’s best Live teaching-learning experience," added Mr Krishna.
The company recorded an increase of 220 per cent during lockdown with more than a million students attending 3.8 million live hours of classes every month.
The shift has been seen in consumer behaviour from offline to online, Mr Krishna said that the company plans to invest in scaling impact, expanding into new categories, and firmly establishing itself in the online live tutoring space.
This is Vedantu`s third round of funding in the last 12 months. It raised US$ 42 million from Tiger Global and others in August 2019 and another US$ 24 million from GGV Capital and Tiger in February 2020. So far, company has raised about US$ 200 million.
Other start-ups in the edtech sector are also capitalising as students go online for learning across cities. In July, Toppr raised US$ 50 million in a Series D round as it plans to scale up operations. Facebook-backed Unacademy too has been on an acquisition spree to grow organically, having acquired learning platforms PrepLadder and Mastree recently. The start-up is reportedly in talks with potential investors to raise between US$ 100 million and US$ 150 million of fresh funding at a valuation that could help it achieve unicorn status.
Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.
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