'My mission is to bridge skilling gap in workforce,' says Eruditus CEO

Eruditus, the newly minted edu-tech unicorn, stands out from the pack in a number of ways. The start-up, which closed $650 million funding at $3.2 billion valuation from Softbank and Accel, operates in the re-skilling space. It offers live-taught university-affiliated courses, in contrast to top-funded Byju’s and Unacademy which target k-21 education and test preparation, respectively.

What also stands out is that Eruditus ran bootstrapped for the first five years of its life – mostly supported by organic revenue and money its founder Ashwin Damera made from his previous start-up exit. “We position ourselves as an up-skilling company for people in the workforce and compete in the market as Courseera and Udemy,” said Damera, co-founder and chief executive, in an exclusive interview with Business Standard.

“The skill-gap is very large and it keeps getting bigger. When I was growing up, we didn’t have things like AI (artificial intelligence) and machine learning. Now, something new comes up every five years and the content must keep up with it,” said Damera, over a call from Mumbai. Eruditus has tie-ups with more than 30 top-tier universities, including MIT, Harvard, Columbia, Cambridge, INSEAD, Wharton, UC Berkeley, IIT, IIM and NUS. The universities and Eruditus co-develop courses, which go for $5,000 to $40,000.

Damera said the firm focuses on a “cohort-based” approach – learners are put in batches and also given graded assignments and feedback from tutors; the entire course runs in a set-time frame. Most other platforms have pre-recorded content that learners cover at their own pace. “We find higher finish rates – about 80 percent – for this reason. Peer group builds accountability.”

In terms of numbers, in the last 12 months over 100,000 learners have taken courses from Eruditus, Damera said. The total booking value – the only metric the firm reveals – was $175 million last year and is seen at $500 million over the next 12 months. The revenue earned is shared with the universities, and about 80 percent of it comes from outside of India, chiefly North America.

“The unbundling of higher education and continued learning has only just started," said Anand Daniel, partner at Accel (investor in this round), in a statement. "We believe that the platform and deep partnerships with the world’s best universities put Eruditus and its partner universities at the forefront of this revolution in higher education."

Given the strong financials and international presence, Eruditus has been able to get some of the top investors on-board. It has raised funding every year over the last three years - $40 million in 2019 from Sequoia and Bertelsmann; $113 billion led by Prosus Ventures and Chan Zuckerberg Initiative last year; and $650 million last week.

Asked whether there is excess capital in edu-tech, Damera said: “A lot of money is being put into tech start-ups as a whole because of the new realities the pandemic has created. 18 months back, if you’d tell me that kids would study on the computers or my grandmother would be learning music on iPad, I would not believe you.” Funding aside, for edu-tech it has been a period of world-wide acceptance and adoption. “Teachers are coming online to create courses and governments are recommending online education. So, for us supply side and regulatory tailwinds are strong,” said Damera.

In this mission, Damera is joined by co-founder Chaitanya Kalipatnapu, who is also a lecturer at INSEAD, one of the top B-Schools in the world. According to Damera, Kalipatnapu played a pivotal role in setting up the firm as he was already working in an executive education role at INSEAD when the two met through a common colleague back in 2010.

“INSEAD was also the first school we got on-board, thanks to Chaitanya’s connections. This was followed by Wharton Business School; in the first five years we signed one school per year as we were focussing on the product,” said Damera.

Second time entrepreneur, Damera setup and ran TravelGuru 2005 to 2010 before selling it off to Travelocity. He did not reveal his take-away from the deal.