Decoding Vedantu’s Series E round and shareholding pattern

Edtech startup Vedantu recently graduated to the coveted unicorn club after its $100 million Series E round led by Singapore based ABC World Asia.

While the company only divulged the size of the round and valuation, Fintrackr has decoded other crucial details of the financing round such as round break-up, current shareholding structure and employee stock option (ESOPs) pool.

Break up of the funding round and valuation

As per Vedantu’s regulatory filings, the company has allotted 101 equity shares and 17,83,567 Series E preference shares at an issue price of Rs 3453.63 per share to raise Rs 616.01 crore or $83 million.

ABC World Asia (Impact Assets Pte. Ltd) has led the round with Rs 222.66 crore followed by Coatue PE which invested Rs 148.44 crore. Tiger Global, GGV and West Bridge have put in Rs 96.5 crore, Rs 89 crore and Rs 59.4 crore respectively.

Responding to Entrackr’s queries, Vedantu’s spokesperson said that this is tranche 1 and more tranches are upcoming. Fintrackr’s estimates show that Vedantu has been valued at around Rs 7,320 crore or $990 million. Its valuation will surpass $1 billion as and when Vedantu receives the remaining sum.

Following the allotment of fresh shares, Vedantu’s co-founders -- Vamsi Krishna, Pulkit Jain and Anand Prakash -- have a collective stake of 6.65%. It’s worth noting that the trio had offloaded their equity shares to KB Global during the Series D round.

Importantly, Vedantu has a Management Stock Option (MSOP) pool in place which accounts for 9.51% stake in the company while the ESOPs pool makes up only 4.23%.

According to Vedantu, the entire MSOP is for founders, so their effective stake is 16.16%.

Among investors, Tiger Global has the largest share of 12.51% in Vedantu, followed by Accel, Coatue and Tal Education Group which hold 12.24%, 11.79% and 10.49% stake respectively.

Founders’ holdings in edtech unicorns: A comparison chart

As far as holding the stake of Vedantu’s co-founders is concerned, it is at par with Unacademy’s co-founders who have 15% stake in the company after Series H round. India’s highest valued firm Byju’s co-founders still hold a 22.55% stake post completion of its Series F round.

Similarly, co-founders of Eruditus, which also turned unicorn in its Series E round, have 41.8% stake in the company whereas the founding team of another edtech unicorn upGrad have more than 70% ownership.

Biz model, acquisitions and financials

Founded in 2014, Vedantu’s core offering covers online classes from grade 6 to 12 along with materials from grade 1 to 12 and JEE. The company ventured into kids coding space (age bracket 6-12) in May 2020. 

Apart from the equity round, Vedantu had also acquired two startups, Instasolv and Pedagogy this year. While Vedantu is yet to file its annual financial report for FY21, its losses in FY20 had widened to Rs 158.5 crore, against Rs 27 crore in FY19. 

According to Fintrackr, the company recorded a 2.88X jump in total revenues to Rs 35.8 crore in FY20 as compared to Rs 12.4 crore in the previous fiscal (FY19).