By DIVANSHU KUMAR Today’s edtech offerings are built for revenue-generation, not education The last two decades have seen a significant boom in technology, primarily when it comes to Internet access for the first billion people, as it’s called. There is optimism that technology can [...]
With the latest capital infusion, Vedantu has become the second most valuable edtech startup in India after BYJU’S, with a valuation of $600 million
Indian live tutoring edtech startup Vedantu has raised US$100 million in a Series D funding round led by U.S.-based technology-focused investment firm Coatue, along with participation from existing investors, the company announced in a press release yesterday.
Rahul Kishore, Managing Director of Coatue, will join Vedantu’s Board of Directors, as part of the deal. The Rainmaker Group acted as the exclusive financial advisor to Vedantu for this round.
This is Vedantu’s third fundraise in the last 12 months. The startup had bagged $24 million in February in an extended Series C round led by GGV Capital and another $7 million from KB Global in April.
Vedantu’s other backers include BYJU’S backer Tiger Global Management, Accel, Trifecta Capital Advisors, and Omidyar Network.
With the latest investment, Vedantu’s total funding has crossed $200 million, while its valuation stands at $600 million, making it the second most valuable edtech startup in India, close behind recently turned decacorn BYJU’S.
Founded in 2014, Vedantu differentiates itself from other edtech players in the market by focusing on live interactive tutoring. The startup offers individual and group live interactive classes across grades K1-12, for all major Indian education boards and competitive exams like JEE and NEET.
Vedantu claims to be the current market leader in K-12 online live tutoring, with more than 25 million users every month from over 1000 cities and more than 40 countries accessing free content, tests, FAQs, and videos on Vedantu’s website and YouTube channels.
In 2019, the startup experienced high growth, with more than 10 million unique students visiting its platform – 3X higher than 2018 – while its YouTube channel registered over 12 million monthly views, and over 3.6 billion seconds of its content was consumed on TikTok every month.
According to the press release, the startup has recorded 220% growth with over 2 million students attending live classes and teachers delivering over 8 million hours of live sessions during lockdowns in India that are yet to be completely lifted.
In India, the third-worst coronavirus hit country in the world, the start of the academic year and reopening of schools have been postponed, creating immense demand for an online education infrastructure. This has piqued the interest of investors, with edtech emerging as a clear winner amid the ongoing global pandemic that has negatively impacted growth in nearly all other sectors.
In fact, edtech has been the only sector in India to register a positive growth in the number of investment deals, apart from healthcare, according to a Venture Intelligence research report. Although startup funding declined by 29% to $4.2 billion in the first half of 2020, edtech startups raked in almost 20% of total VC investments in India, totaling $795 million.
Compared to $108 million raised by edtech startups in the same time last year, investments in edtech grew more than 6X in 2020. The investments were largely led by BYJU’S, which raised almost $500 million this year and attained a valuation of $10.5 billion, and Unacademy, which raised $110 million at a valuation of $510 million.
The latest shift in consumer preference from offline to online education is what Vedantu is looking to leverage, and the startup is investing to scale operations for greater impact and expand into new categories to establish its foothold as the market leader in live online tutoring, according to the press release.
During the pandemic, Vedantu ventured into the early learner segment with its coding program for children between 6-12 years called Vedantu SuperKids, and the startup plans to launch more programs in the category in future.
Vamsi Krishna, CEO and Co-Founder, Vedantu said, “Vedantu has always believed in the concept of LIVE interactive classes being a superior format for online learning which creates greater learning outcomes. During lockdown, everyone is talking about LIVE classes and it is the best time for us to drive more adoption and strengthen our brand as the best destination for LIVE classes.”
“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,” he added.
Coatue Managing Director Kishore said, “Online learning adoption in India is at an all-time high setting a new benchmark for the rest of the world. As we continue to focus on driving high-growth ventures, 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 & scale,” he added.
The Indian edtech market is growing at a phenomenal rate. According to a report by RedSeer and Omidyar Network India, paid and free user base in the K12 and post K-12 segment has doubled from 45 million to 90 million since 2019, while time spent has increased by 50%.
Moreover, the shift in preference from offline to online education has increased people’s willingness to pay for online education by 40%, while the paid user base has jumped up by 83% since 2019, the report states.
The edtech market in India is estimated to grow massively, with online education offerings for classes 1 to 12 projected to increase 6.3 times by 2022, creating a $1.7 billion market, while the post K12 market will touch $1.8 billion by 2022, according to the report.
Header image courtesy of Vedantu: Co-founders of Vedantu (L-R) CEO Vamsi Krishna, Head of Academics Anand Prakash, and Product Head Pulkit Jain