Mumbai: Toppr Technologies Pvt. Ltd, an education technology (edtech) startup, has raised $35 million in a Series C round led by education-focused investor Kaizen Private Equity, venture debt firm Alteria Capital and Brand Capital, the investment arm of media house Times Group, said a senior executive.
Toppr runs an app providing education content for students from Class 5 to Class 12. This includes test series, question banks, chats for solving doubts and preparation for entrance exams in engineering, medicine, law and chartered accountancy.
Existing venture capital investors of Toppr—Eight Roads Ventures, Helion Ventures and SAIF Partners—also participated in the round.
While 40% of the funds will be used for advertising and brand building, the remaining will be allocated towards product development, increasing engagement and investing in technology, Zishaan Hayath, the founder and chief executive officer of Toppr Technologies, told Mint.
India’s education technology space is dominated by Byju’s, which has raised $540 million at a valuation of $3.6 billion, in a funding round led by South African internet giant Naspers. The funding has made founder Byju Raveendran a billionaire overnight.
Byju’s investors include Tencent, the Chan Zuckerberg Initiative, Sequoia Capital, Lightspeed Venture Partners and private equity giant General Atlantic.
Although Byju’s is bigger, Toppr’s Hayath claimed students spend 110 minutes a day on the Toppr app, almost three times as much as Byju’s.
“Our challenge is to demonstrate engagement, and that is what we are focussed on. Five years ago, no investor would have touched the education sector. We have established a category," Hayath said.
The Toppr app currently has about six million users, according to Hayath, a figure he hopes will jump to 30 million by 2020.
“Students are moving away from coaching classes, and our focus is on increasing their engagement time with the Toppr app, and substituting local tuitions with a digital platform," said Hayath.
In May this year, the startup raised $2.3 million (₹15.5 crore) from Alteria Capital.
Prior to that, it raised $7 million in October last year from Helion Ventures, Eight Roads Capital and SAIF Partners.
Hayath said that Toppr is already in talks to raise $80-100 million for its next round from new as well as existing investors.
He declined to elaborate.
The latest deal also marked education-focused Kaizen’s second investment this year, after it co-invested in Varthana, a lender to private schools catering to students from low-income households, in April.
“We are very impressed with Toppr because they are focused on learning outcomes in a personalized manner. We have been tracking them for four years, and they have kept spending low and been investing in an artificial intelligence (AI)-driven algorithm," said Sandeep Aneja, managing partner at Kaizen.
He also said in the next funding round, Kaizen would like to increase its stake. It has picked up under 10% stake in the current round.
About 40% of Toppr’s users are from Tier 1 cities, with the rest from smaller towns.
As the company expands, this could change, because Toppr does not have a geographical focus, and is looking for growth from all segments.