Edtech startup Eruditus has raised $150 million in a fresh funding round led by American private equity firm TPG’s impact investment platform The Rise Fund.
Eruditus’ existing investors Softbank, Leeds Illuminate, Accel, Canada Pension Plan Investment Board (CPPIB) and the Chan Zuckerberg Initiative also participated in the Series F round, the company said.
This is entirely a primarily round and values the company at about $3 billion, chief executive Aswhin Damera told VCCircle.
“We're looking to flip to India. From a structure perspective, it will be easier to raise [the amount] as primary [capital] and pay the earnout component (for one of our previous acquisitions), which we earlier planned to do with a smaller secondary round,” said Damera.
The latest round comes more than three years after Eruditus raised its Series E round in August 2021, when it garnered $650 million led by Accel and Softbank in a mix of primary and secondary funding. The round had propelled Eruditus into the coveted unicorn club, valuing it about $3.2 billion.
“The markets in 2021 were way better than they are today. If we look around, we are not helped by the (state of edtech) space,” he said. “We are happy with the valuation. It is the right valuation.”
The capital infusion is significant for edtech in India that has been forced to think of profitability in the last three years. Besides Eruditus, edtech firm PhysicsWallah closed a $210 million funding round led by Hornbill Capital and Lightspeed last month.
For Eruditus, achieving operational profitability for fiscal year 2023-24 helps its case, while other bigger names in the industry grapple through a challenging period. Byju’s, for instance, is dealing with insolvency while Unacademy’s financial performance was flat last year.
Barring Byju’s, Eruditus is the largest edtech company in terms of revenue, recording over Rs 3,800 crore in 2023-24, along with nearly Rs 80 crore in Ebitda.
Founded by Damera in 2010, the firm caters to the higher-education market. It works with top universities around the world including MIT, Harvard, Wharton, Cambridge, and INSEAD to offer executive-level courses to students in over 80 nations.
“We are profitable, it is not the core business that needs money,” said Damera. “We want to look at small acquisitions over the next few years–nothing imminent–but especially in areas such as enterprise, which is a focus area.”
He added the capital will also be invested to grow its India business, as that is where it will eventually consider a listing, but only once it completes the flip to India.
Overall, the capital will go towards investing in artificial intelligence products, expand its enterprise business through acquisitions, and deepen its investments in the India and Asia-Pacific regions.
Avendus was the exclusive financial advisor to Eruditus on this transaction.
