Indian edtech company Vedantu, which specializes in live online tutoring for kindergarten to 12th grade students, became a unicorn on Wednesday after it announced a $100 million Series E round led by Singapore’s ABC World Asia, an impact investing firm, which backs socially conscious companies. The investment values Vedantu at $1 billion bringing the total number of Indian edtech players to enjoy unicorn status to five.
“This round was important for us to expand into sub-categories like vernacular offerings for domestic users and co-curricular classes for overseas users,” says Vedantu’s CEO and cofounder Vamsi Krishna.
The funding, to be infused in multiple tranches, will close over the next few weeks and will see participation from existing investors such as Coatue, Tiger Global, GGV Capital and Westbridge. The funds will be used to improve product engineering as well.
Vedantu is India’s second-largest company in K-12 in terms of revenue and number of students. The Bangalore company offers individual and group classes for K to 12 as well as test-prep for competitive exams like medical and engineering and classes for English speaking, reading and coding. Vedantu recorded a four-fold rise in revenue in fiscal 2021 to $20 million. It expects annualized revenues of $65 million in the current year.
With richly funded rival Byju’s—valued at $16 billion—doing a series of acquisitions since the start of the year, there were rumors of a takeover of Vedantu by Byju’s. (Byju’s has spent more than $2 billion so far in 2021 taking over nine companies across test prep; coding and skills training.)
“We are not even remotely thinking of selling and this has nothing to do with us being rigid,” says Krishna. “Education is a huge category in India and this is a place where you can’t have monopolies. And we still have 95% of the education market that is not penetrated.”
Krishna is confident of more than doubling paid annual subscriptions to 500,000 in fiscal 2022 from 200,000 in fiscal 2021. Vedantu has more than 35 million free users who log into the website and app from more than 50 countries.
A civil engineer from India’s premier IIT Bombay, Krishna worked for six months at engineering behemoth L & T before he ventured out on his own. He started his entrepreneurial journey in 2006 by setting up Lakshya, an engineering and medical test prep company, along with three IIT pals. They sold that venture to MTEducare six years later for 300 million rupees ($7 million).
The four teamed up again to start Vedantu in 2012. They zeroed in on the name “Vedantu” which translates to a “knowledge network.” The idea was to provide a knowledge network to students who want to access learning. They started offering live online classes in 2014.
Of the four cofounders, one left in 2017 but Krishna and two others, Pulkit Jain and Anand Prakash, still run Vedantu. Between them, the threesome own 15% of Vedantu. Krishna, who handles branding, marketing and recruitment, says he’s looking at an IPO in the next two and a half years. He expects Vedantu to clock $500 million in revenue by then.