Unpacking Eruditus’ latest round, secondary component and shareholding

Upskilling focused edtech firm Eruditus has emerged as the dark horse in the space after checking into the unicorn club with a mega fundraise last month. That fundraise, and the valuation spike it came with makes it the only Indian startup to start its membership of the unicorn club at a valuation nudging $3 billion.

Softbank is the heavy hitter here, with over a quarter billion dollars ($260 million) between its primary and secondary purchases.  

With a focus on postgraduate programs for working executives from leading institutions across India and worldwide, Eruditus has gone with a niche, but much more lucrative segment in the education space. 

While the company had announced this round in August, it didn’t offer much details about the round’s specifics. Fintrackr has decoded vital information such as split of the round and shareholding structure to arrive at a better picture. 

Primary infusion: $465 Mn

Eruditus has raised a total of $701 million in the last round from 7 investors in primary ($465 million) and secondary capital ($236 million), the company’s filings in Singapore show. SoftBank led the latest primary round with $150 million whereas Accel Leaders and Prosus have put in $130 and $92 million respectively. 

CPPIB has infused $40 million while Chimetech and Leeds Illuminate with $20 million and $24.62 million respectively. The Chan Zuckerberg Initiative, owned by Facebook founder Mark Zuckerberg and his wife Priscilla Chan, added $8.5 million. 

Secondary component: $236 Mn

Apart from this primary infusion, investors in the company have offloaded shares worth $236 million to new investors. Co-founders have sold stakes worth $101 million to CPPIB ($71.5 Million), Prosus ($24 million) and Chimetech ($5.6 million). Early investor Bertelsmann scored big in this secondary transaction, offloading shares worth $120 million to Softbank ($110 million) and Prosus ($10 million). 

Existing investors Konaissance Ventures and Samir Hasija also sold shares worth $15 million to CPPIB, GSV and Prosus in this transaction.

For the  Chan Zuckerberg Initiative, the new funding is a follow on to its first $15 million in August 2020 in Eruditus. The investment firm was also an investor in Byju’s in 2016 and had offloaded its stake in the company with over 7X gains in January last year.

Eruditus’ current shareholding structure

Post completion of this round, Bizu Learning LLP, has emerged as the largest stakeholder in the company with a holding of 41.8%. The LLP represents co-founders Bhagyashree and Ashwin Damera. As per the Fintrackr database, the co-founders of 27 startups who became unicorns this year have largely seen their own stakes diluted to a range of 15-20% by the time they reached the coveted figure.

Among institutional investors, Prosus now owns the largest pie with 12.82% whereas Bertelsmann and Sequoia have respective ownership of 6.40% and 7.05%. SoftBank has picked up 9.32% with its maiden investment in the Mumbai-based company. Leeds(5.05%) and Accel Leaders (4.7%) collectively control a little less than 10% in Eruditus. 

See below pie-chart for complete shareholding pattern:

While the company is yet to file annual financial statements for FY21, the company had claimed $185 million in revenue in the fiscal ending March 2021. The company is contemplating a topline of $500 million in the ongoing fiscal (FY22).