When IppStar researched the book publishing and printing industries in India and Bangladesh in 2019, it was difficult to grasp that the edutech sector in India alone is forecast to generate revenues of anywhere from US$ 25 to 35 billion (Rs 185,000 to Rs. 280,000 crore). However, with the continuing Covid-19 constraints on students going back to brick and mortar schools anytime soon, the figures seem credible.
With many, if not all, sectors rapidly adapting to digital, online education seems to have already caught on in urban and semi-urban markets. There are reports of children in the rural market, also accessing classes on smartphones. For a while, Indian teachers have been tutoring students overseas online, and now centers like Kota designed for cramming for competitive exams are also going online. On just one eductech investment website, 42 leading Indian startups are listed in the eductech sector.
In this upbeat context, Bengaluru-based online live tutoring company Vedantu has raised US$ 100 million in a fresh funding round from a group of investors led by New York-based Coatue. Existing investors in Vedantu, such as GGV Capital, Omidyar Network, and Tiger Global, have also taken part in this round of Series D funding. According to the company’s press release, the new round values the company at US$ 600 million. The leader in the Indian edutech sector is Byju’s, valued at over US$ 8 billion.
This is Vedantu’s third funding round in the past 12 months. The company raised US$ 12.56 million in an extended Series C round led by Legend Capital in April 2020. US$ 24 million were raised in February 2019, and US$ 42 million in August 2019. According to Vedantu, it has raised more than US$ 200 million, including the latest round of Series D funding.
Coatue’s managing director Rahul Kishore commented on the investment, “Online learning adoption in India is at an all-time high setting a new benchmark for the rest of the world. As we continue to focus on driving high-growth ventures, our investment in Vedantu marks our entry into the Indian edutech market. This move underlines our strategy to partner with companies that are strategically positioned for high growth and scale.”
Vedantu’s co-founder and CEO Vamsi Krishna explained how the company will use the capital infusion, “Vedantu has always believed in the concept of ‘live’ interactive classes being a superior format for online learning which creates greater learning outcomes. During the lockdown, everyone is talking about live classes, and it is the best time for us to drive more adoption and strengthen our brand as the best destination for live classes. On top of adding new categories, we will use the funds to invest in content and technology to create the world’s best live teaching-learning experience.”
The company says it has recorded a growth of 220% during the Covid-19 pandemic lockdown, with more than two million students taking live classes delivered over 8 million hours of interactive courses. With over one million students participating in the live study each month on its platform, it claims to have more than 25 million users in India and more than 40 countries. It says these users access content and videos, including free content and videos on its platforms and YouTube channels.
Vedantu says it is planning to scale up its live tutoring category and expanding in other age segments. It sees the lockdown as having effected a definitive push or catalyst for consumers to shift online and sees itself as the online tutoring brand.