Edtech unicorn Eruditus secures $350 Mn in debt from CPPIB

Edtech firm Eruditus has secured $350 million in what appears to be the second-largest debt round raised by an Indian edtech startup. The SoftBank-backed company has received the funds from Canada Pension Plan Investment Board (CPPIB) through its subsidiary CPPIB Credit Investments Inc.

Last year, Byju's raised $1.2 billion in a  debt round to fuel its acquisition drive. Coming as it does in the Edtech space again, the funding seems to indicate investor comfort with the ability of the investee firms in this case to identify and value the right firms for inorganic growth. 

Eruditus will use the funding for mergers and acquisitions around the world, said the Singapore-registered company in a press release. In May last year, it had acquired Silicon Valley-based iD Tech in a $200 million deal to expand into the K12 space. The edtech space has easily been one of the most active when it comes to M&As, with Byju’s itself leading the charge.  

After the completion of this debt financing, Eruditus will have raised more than $1 billion in debt and equity. It’s worth noting that CPPIB had also participated in Eruditus’ $650 million Series D funding round in August 2021, which was led by Accel and SoftBank at a  $3.2 billion valuation.

As per Fintrackr’s database, CPPIB had infused $40 million in Eruditus’ Series D round and holds 4.3% stake in the company. The company’s investors include GSV, the Chan Zuckerberg Initiative, Leeds Illuminate and Prosus, Sequoia Capital India, Bertelsmann and Chimera.

Led by Chaitanya Kalipatnapu and Ashwin Damera, Eruditus offers executive courses for working professionals in partnership with top tier universities such as MIT, Columbia, Harvard, Cambridge, INSEAD, Wharton, UC Berkeley, IIT, IIM and others. The firm claims to have launched more than 100 courses in multiple languages, including Spanish, Portuguese and Mandarin and educated over 250,000 individuals across more than 80 countries.

While Eruditus is yet to file annual financial statements for the fiscal year ending on March 31, 2021, the company had claimed that it registered $185 million in revenue during FY21. 

With a year-on-year growth rate of 120%, Eruditus estimates gross bookings of $500 million for FY22. As per the company, the pipeline of potential acquisitions is expected to contribute up to 30% of its top line and EBITDA in the next five years.