Live online tutoring startup Vedantu in unicorn club with $1 bn valuation

Vedantu has raised $100 mn in funding. The firm which is competing with Byju's, Unacademy, Simplilearn, UpGrad and Amazon Academy is also planning an IPO by 2024

Vedantu, the pioneer in live online tutoring, has raised $100 million in its Series E round, led by Singapore based impact investing fund ABC World Asia. The round also saw strong participation from existing investors – Coatue, Tiger Global, GGV Capital, Westbridge among others.

The Bengaluru-based edtech firm has been valued at $1 billion in the latest round of funding, making it the newest member of the coveted unicorn club. It is the 28th startup to achieve unicorn status in 2021 alone. It is now the fifth such edtech firm in India. The funding also underlines Vedantu’s status as the largest K-12 Live online tutoring company in India.

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 would also help it to compete with edtech players such as Byju’s, Unacademy, Simplilearn, UpGrad and Amazon Academy and tap the country's $180 billion education sector that has gone online to adapt to the new reality. Vamsi Krishna, chief executive officer and co-founder of Vedantu, said the firm is also planning to go for an initial public offering  (IPO) by 2024.

“We want to create a company that outlasts our lives and continues to innovate for decades to come,” said Krishna. “Our vision is simple: Unleash the potential in every child. We will continue to innovate to reach as many students as possible and create 10x better experiences and outcomes for every child at Vedantu.”

Vedantu’s latest round will close over the next few weeks, with more investors joining in subsequent tranches. The Rainmaker Group acted as the exclusive financial advisor to Vedantu on their fundraising.

Challenging the status quo in India’s K-12 tutoring space, Vedantu was the first company to offer Live online classes in 2014 and is credited with creating the category. It has continued to be a pioneer in the space with several first-time innovations that include ‘Wave’ its proprietary Live teaching platform, and the 2-teacher model. Both these innovations are playing a big role in improving student outcomes for the company. Some of the company’s innovations have been granted patents in the US. The company looks to continue to innovate further on the Live teaching format and penetrate deeper in the K-12 segment by reaching more students.

Today, Vedantu offers tutoring courses to young students from 3 years old to 18 years old, as well as preparation for competitive exams such as IIT-JEE, NEET, Commerce, CBSE, ICSE, and state exams such as Maharashtra boards. Through its newest offering and fastest-growing vertical, SuperKids, it offers extracurricular classes like English speaking, reading, and coding.

An alumnus of IIT-Bombay, Krishna has been a teacher for over 10 years and has now emerged as a seasoned edtech expert. In the early stage of his career, Krishna, along with his IITian friends Pulkit Jain and Anand Prakash, had founded his first educational venture called Lakshya, an offline test preparation organisation, in 2006. Lakshya was subsequently acquired by MTEducare in 2012. After the acquisition, they founded Vedantu, which has now emerged as India’s leading Live online tutoring firm. The name Vedantu is formed by two Sanskrit words signifying a 'knowledge network', where a student can tap into and learn from a teacher, anytime and from anywhere.

“Back in 2014, when we held our first Live class, nobody believed this would work,” said Krishna, chief executive officer and co-founder, Vedantu. “It is super satisfying to see this format becoming mainstream and Vedantu leading the way in innovative online delivery experiences.

Each month, over 35 million users’ access Vedantu through its app and web for free. Its YouTube channel gets 65 million views, the highest in the K-12 segment for any educational company in India. Students also access Vedantu through its dedicated Channels on Airtel TV and TATA Sky. Vedantu catered to over 200,000 paying students last year, a 300 per cent growth over the previous year. This growth was accompanied by a revenue increase of 4.5x over the previous year, making it the fastest growing online education company in this space and the overall second-largest company in K-12 in terms of revenue and number of students.

Sugandhi Matta, chief impact officer, ABC World Asia, said Vedantu embodies its investment themes of providing better access to quality education and using digital technology to improve lives and livelihoods. Matta said in India, online education 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,” said Matta.