Toppr raises Rs 44 crore via debt and preference capital from Milestone

The trend that started in 2017-18 where most of the edtech startups were able to raise impressive capital, seems to be continuing into the new calendar year.

Last December, BYJU’s had raised a staggering $540 million, the tranches of which are still coming in. But even before that, in October Toppr had closed a $35 million round led by Kaizen Capital along with existing investors.

The Zishaan Hayath led personalised learning app Toppr’s fundraising activities are still going one. However, this time the heavier weight is given to debt capital instead of preference.

Since February Milestone Trusteeship has added Rs 44 crore in the firm’s balance sheets. Rs 40 crore, out of this, is in form of debt capital issued via 4,000 Series B debentures priced at Rs 1 lakh each.

Rest of the amount was raised through 6,342 Series C1 CCPS, each at a rate of Rs 6,308.07 taking the preference total to Rs 4 crore.

To understand why Toppr needed to raise money, let’s look at the plans the company had set in the last funding round. It wanted to work on the branding, to compete with BYJU’s.

Seeing that BYJU’s already has an established brand and a houseful of cash to keep that position in the market, fundraising beyond $35 million becomes important for Toppr.

Further, if we look at Toppr’s financials in the previous fiscal, even with a 4X growth in revenue to Rs 25.66 crore, the loss figure was more than double the revenue at Rs 59.87 crore.

To cover up these metrics as well as increase market value via branding and increasing traction on the platform, timely incoming of funds is the obvious requirement.

Till December last year, Toppr had a tutorial staff of 29,000 people and six million downloads. Its monthly active users stood at one million.

Given that Toppr competes with BYJU’s, Unacademy, Udemy, Embibe, Onlinetyari, Meritnation, UpGrad and others, it would be interesting to witness the results of the deployment of new funds.

Not to forget, the recent fiscal just ended, and people are keenly interested in the financial performance of edtech startups that have seen an investment boost in the last two years.