Exclusive: Vedantu seeks $1 Bn valuation in a new round

Edtech firms have outnumbered other sectors in terms of raising funds in the past year. After Byju’s, Classplus and upGrad, Vedantu is in talks to raise a fresh round from new and existing investors, said three people aware of the details of the deal.

This would be the maiden fundraise for the Bengaluru-based company in 2021.

“Several new investors including Owl Ventures are in conversations to lead a $150 million new round in Vedantu,” said one of the people requesting anonymity. “Existing investors including Coatue, Tiger Global and Accel would also participate.”

The talks, however, are at an early stage and no term sheet has been given yet.

A year ago, Vedantu had raised $100 million at a post-money valuation of over $500 million, according to Fintrackr calculation. Importantly, three co-founders had also sold out secondary shares during its Series D round in July 2020.

It’s worth noting that the company was in talks with KKR to raise about $100 million. However, it looks like the talks didn’t materialise. Entrackr couldn’t verify KKR's participation in this round.

“Vedantu is seeking a valuation of $1 billion in the fresh round. However, investors are not keen to value it over $800 million,” said the second person who also wished not to be named as talks are yet to be public. It’s unclear if the company will in fact be valued at $1 billion or not in this round. 

Queries sent to Owl Ventures didn’t elicit any immediate response whereas Tiger Global and Vedantu have declined to comment on the story.

Vedantu’s core offering covers online classes from grade 6 to 12 along with materials from grade 1 to 12 and JEE. The company also ventured into kids coding space (age bracket 6-12) in May 2020.

The talks for the new round for Vedantu have come at a time when several edtech companies such as Unacademy is set to mop up $450 million led by Temasek. Classplus is also in late-stage talks to corner $25 million from Tiger Global whereas Eruditus is reportedly in talks to raise a new round at a valuation of $2.5 billion.

Just like in 2020, this year has had a great run for edtech companies in India. Byju’s had recently raised over $340 million and replaced Paytm to become the highest valued startup in India.

Founded by Vamsi Krishna, Anand Prakash, Pulkit Jain and Saurabh Saxena, Vedantu had posted an operating revenue of Rs 25 crore during FY20. While its revenue grew by 69% in FY20, the company’s expenses shot up to the tune of 5.9X to Rs 196 crore.