Edtech Startup Vedantu Raises INR 19.25 Crore in Strategic Debt-Equity Mix
Bengaluru-based edtech startup Vedantu has successfully raised INR 19.25 Cr (approximately $2.4 Mn) through a combination of debt and equity financing, despite the ongoing funding crunch in the Indian edtech sector. The investment was secured from Stride Ventures Debt Fund II, marking a strategic move for the company as it navigates a challenging landscape.
Founded in 2014 by Vamsi Krishna, Anand Prakash, and Pulkit Jain, Vedantu has become a key player in India’s edtech space. The platform offers online and offline courses, catering to school students as well as those preparing for competitive exams like NEET and JEE. It has also diversified its offerings to include curated courses for younger students aged 4 to 12 years.
In 2021, Vedantu achieved unicorn status, joining the coveted $1 billion valuation club after raising $100 Mn in a Series E funding round led by Temasek-backed private equity firm ABC World Asia. Other investors in the round included Coatue Management, Tiger Global, GGV Capital, and WestBridge.
According to regulatory filings, Vedantu raised INR 17.5 Cr through the issuance of 1,750 unlisted, secured, redeemable non-convertible debentures (NCDs), each with a face value of INR 1 lakh. The remaining INR 1.75 Cr was obtained by issuing 4,968 series E2 partly paid-up compulsory convertible preference shares (CCPS) at an issue price of INR 3,522.80 per share.
Despite securing this fresh round of funding, Vedantu’s financials indicate a mixed performance for the fiscal year 2022-23 (FY23). The startup’s losses declined by 46%, falling to INR 372.6 Cr from INR 696.2 Cr in the previous fiscal year. However, its revenue from operations also saw a decline, dropping 8% to INR 152.5 Cr from INR 166 Cr in FY22.
The reduction in losses suggests that Vedantu is taking steps toward financial stability, but the dip in revenue reflects ongoing challenges in the sector. The company’s future growth strategy will likely focus on optimizing operations while continuing to cater to its broad educational offerings.
The funding comes at a critical time for Vedantu, as the broader Indian edtech sector faces significant headwinds. The sector, which saw a massive infusion of venture capital during the COVID-19 pandemic when schools and colleges were shut down, has since experienced a sharp decline in investor interest. With the reopening of physical educational institutions, demand for online learning has waned, leading to a funding crunch across the sector.
Additionally, several edtech startups have faced internal challenges, including excessive cash burn, mounting losses, and governance issues, further complicating the investment landscape.
For Vedantu, this latest round of financing provides a much-needed boost as it continues to adapt to the evolving post-pandemic educational environment. The company’s ability to reduce losses and secure funding in a difficult market is a positive indicator, but it will need to navigate these challenges carefully to maintain its competitive edge.
