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Business News/ Companies / News/  Eruditus taps PEs, SWFs for $100-150 mn

Eruditus taps PEs, SWFs for $100-150 mn

Indian higher education startup Eruditus is seeking to raise $100-150m in funding from private equity and sovereign wealth funds, according to anonymous sources. The Mumbai-based company plans to issue new shares and some existing investors will also divest their holdings. Despite recent challenges in the edtech sector, Eruditus is confident in protecting its valuation after becoming a unicorn in 2021. It is working with investment bank Avendus to find investors and plans to use the funds for acquisitions and expansion. Eruditus offers executive-level courses in partnership with universities worldwide.

Eruditus taps PEs, SWFs for $100-150 mnPremium
Eruditus taps PEs, SWFs for $100-150 mn

Mumbai: Higher education startup Eruditus has reached out to top private equity (PE) and sovereign wealth funds (SWF) to raise $100-150 million, two people aware of the development said. The fundraising will see the Mumbai-based company issue new shares, while some existing investors will also divest their holdings.

Despite the turmoil in edtech and the broader dip in startup valuations, Eruditus is confident of protecting its valuation after turning cash flow positive last month, one of the persons said.

“The company is reaching out to PE funds and SWFs for the new funding round. The valuation is yet to be discovered," the person said on condition of anonymity.

Eruditus has appointed investment bank Avendus to help find investors.

“Around $60-75 million will be a secondary sale of shares and the remaining will be fresh equity raise," the second person said.

Eruditus turned a unicorn— a startup valued at $1 billion or above — in 2021, when it raised $650 million in a new financing round led by Accel and SoftBank Vision Fund 2 at a valuation of $3.2 billion. In 2022, it raised $350 million in debt from CPPIB, the Canadian pension fund manager, to finance acquisitions. It has time till November 2025 to repay the debt.

In an interview this May, Ashwin Damera, co-founder and executive director, Eruditus said the company is actively pursuing acquisition opportunities for its enterprise business, and edtech firms offering advanced courses in fields like law, journalism, and specialized commerce.

Another company executive said Eruditus’ FY23 operating revenue grew to $400 million from $245 million in FY22. The company also achieved earnings before interest, tax, depreciation & amortization (Ebitda) of 3% in June 2023 quarter on a pro forma basis (unaudited).

It is expected to reach double-digit Ebitda in FY24 on a full-year basis. The company follows a July-June financial year.

A spokesperson for the company declined to comment. A spokesperson for Avendus did not immediately respond to email seeking a comment.

Eruditus works with top universities across the US, Europe, Latin America, Southeast Asia, India and China to offer more than 100 executive-level courses to students in over 80 nations. It has tie-ups with more than 30 top-tier universities, including MIT, Harvard, Columbia, Cambridge, INSEAD, Wharton, UC Berkeley, IIT, IIM and NUS.

The company says it offers short courses, degree programmes, professional certificates and senior executive programmes. Founded in 2015, Emeritus, part of Eruditus Group, has offices in Mumbai, New Delhi, Shanghai, Singapore, Palo Alto, Mexico City, New York, Boston, London and Dubai.

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Ranjani Raghavan
Ranjani Raghavan writes about the Indian investment ecosystem with a focus on venture capital, private equity and startups. Outside of work, she enjoys sketching and birding. You can find her @ranjanir_
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Published: 10 Jul 2023, 11:26 PM IST
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