New Delhi: Vedantu has raised $100 million, as part of its Series D round, which has doubled its valuation to $600 million, making it the second-most valued edtech startup in India, after Byju’s.
Vedantu’s fund-raise was led by New York-based hedge fund Coatue, that has backed Uber, Spotify, Bytedance globally, and has invested in Swiggy and Rebel Foods in India. Existing investors such as Tiger Global and GGV Capital also participated in the round. Rahul Kishore, managing director of Coatue will join Vedantu's board.
Edtech platforms have benefited from the extended lockdown in the country, when the covid-19 crisis forced educational institutions to suspend classroom teaching. Edtech startups stepped in to fill the gap with online classes to further student engagement.
Increased investor interest is also a result of the rise in digitisation of education amidst the pandemic.
Byju’s raised $100 million in June from US-based technology investor Bond, at a valuation of $10.5 billion. Earlier, in February, another edtech startup Unacademy had raised $110 million from Facebook and General Atlantic valuing it at $510 million.
In the first six months of 2020, venture capital firms (VCs) have shown a clear preference for ed-tech startups with $795 million raised compared to $108 million in the year ago period, according to data from Venture Intelligence research.
“Our investment in Vedantu marks our entry into the Indian edtech market. This move underlines our strategy to partner with companies that are strategically positioned for high growth and scale. Online learning adoption in India is at an all-time high setting a new benchmark for the rest of the world," said Coatue’s Kishore.
Vedantu offers live interactive classes to students across grades K1-12, for all major boards and competitive exams like JEE and NEET. During the pandemic, Vedantu entered the early learner segment with the launch of its coding program for 6-12 years called Vedantu SuperKids. It also launched a reading programme and plans to add more programmes in this category.
“During lockdown, everyone is talking about live classes and this is the best time for us to drive more adoption and strengthen our brand as the best destination for Live classes," Vamsi Krishna, CEO and co-founder of Vedantu said in a telephonic interview.
“On top of adding new categories, we will use the funds to invest into content and technology to create the world’s best Live teaching-learning experience," added Krishna.
Vedantu recorded a growth of 220% during lockdown with more than a million students attending 3.8 million live hours of classes every month.
With this shift in consumer behavior from offline to online, Krishna said the company is investing to scale impact, expand into new categories, and firmly establish itself in the online live tutoring space.
This is Vedantu`s third round of funding in the last 12 months. It raised $42 million from Tiger Global and others in Aug 2019 and another $24 million from GGV Capital and Tiger in February this year. It has raised about $200 million till date.
Other startups in the edtech sector are also capitalising as students go online for learning across cities. In July, Toppr raised $50 million in a Series D round as it plans to scale up operations. Facebook-backed Unacademy too has been on an acquisition spree to grow organically, having acquired learning platforms PrepLadder and Mastree recently. The startup is reportedly in talks with potential investors to raise between $100 million and $150 million of fresh funding at a valuation that could help it achieve unicorn status.