(Bloomberg) — Tutoring service Vedantu became India’s latest startup to reach a $1 billion valuation after raising funds from investors betting on the country’s rapidly growing online education market.
Singapore’s ABC World Asia led the $100 million Series E round, with existing investors such as Tiger Global Management, Coatue Management and GGV Capital also participating, Vedantu said in a statement Wednesday. The Bangalore-based startup becomes the fifth Indian edtech unicorn after Byju’s, Unacademy, UpGrad and Eruditus, and the third to reach the milestone this year. Online education is among industries benefiting as global investors boost their bets on the country’s startup ecosystem.
Vedantu launched its live-tutoring services seven years ago, an early entrant into the burgeoning field. It targets 500,000 paid users by March 2022, up from about 200,000 currently, said Vamsi Krishna, co-founder and chief executive officer.“We pioneered live online tutoring in 2014 when India didn’t even have 4G coverage and struggled for four years before usage picked up,” Krishna said in an interview. Krishna, 38, and his three fellow founders started Vedantu after shutting an earlier offline teaching venture because scaling it up was difficult. The founders are childhood friends and all graduates of Indian Institute of Technology.Vedantu offers live classes to students from 3 to 18 years, augmenting school lessons or helping them to prepare for India’s competitive engineering and medical school entrance exams. It plans to use the funds to fortify its technology and expand into newer categories, including via acquisitions. Scores of digital learning startups are sprouting in India as the pandemic shut down schools and shuttered after-school classes, prompting a rush online by parents, students and teachers. Live tutoring hourly fees range from 100 rupees ($1.35) for a micro-course to 45,000 rupees for a year-long program preparing the student for competitive exams. Vedantu’s current annual revenue run rate is $65 million and the company is projecting a 4.5 times jump in sales for the year ending in March 2022. It has 35 million users. Learners can also access recorded classes for free through its app and via channels like YouTube and satellite TV. Its newer offerings include classes in public speaking, financial literacy, entrepreneurship and mental wellness.
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