Exclusive: Edtech startup Vedantu to raise $100 million, double valuation to $600 million in just 3 months

Online education startup Vedantu is in advanced talks to raise $100 million led by New York-based hedge fund Coatue Management at a valuation of $600 million, said two people aware of the matter, requesting anonymity as the talks are private.

This will double Vedantu’s valuation in just three months, driven by the COVID-19 pandemic which has boosted online education.

Founded by Vamsi Krishna, Pulkit Jain, Anand Prakash and Saurabh Saxena in 2011, Vedantu currently provides live coaching classes for K12 students, including for entrance exams such as IIT JEE Main and Advanced for engineering and NEET for medical colleges.

It provides classes for CBSE and ICSE, as well as various state boards, along with sample question papers, revision notes, mock tests and previous year’s papers.

While it was adding about one lakh students a month until February, it has added 12-15 lakh students in the last three months alone because of the pandemic which has forced students to resort to online classes, said the people cited above.

Vedantu has been raising funds frequently, particularly in the past one year. Its investors include Tiger Global Management, VC firm Accel, Omidyar Network, private equity firm Westbridge Capital and GGV Capital. Chinese fund Legend Capital and The Advanced Learning (TAL Group), a Chinese ed-tech firm, are also investors in the company.

Vedantu was valued at $280 million in April, according to an Entrackr report.

Vedantu declined to comment while Coatue did not respond to an email seeking comment

Coatue, which is leading the funding round, is emerging as a prolific late stage investor in Indian startups. The New York-based hedge fund has invested in food delivery firm Swiggy, cloud kitchen firm Rebel Foods and payments aggregator BharatPe in India so far. Swiggy, in 2018, was its first Indian deal.

Coatue is also an investor in Zuoyebang, a Chinese online tutoring startup somewhat similar to Vedantu.

“Hedge funds have billions under management globally and are fairly aggressive on technology deals. Hence they are able to give the valuations that a founder may seek, unlike more conservative private equity or growth funds,” said a person close to the deal, requesting anonymity.

As recently as early 2019, many ed-tech startups either were not monetising or were struggling to monetize their platforms. However, the pandemic has provided unprecedented scale to many of these players. Even today, most of the new students joining Vedantu’s platform are using it for free, but investors say they are bullish on the longer-term money-making plans.

Moneycontrol earlier reported that ed-tech firm Whitehat Jr., despite being just 1.5 years old, was raising funds at a valuation of $350 million while Unacademy, another ed-tech platform, is seeking to raise funds at a billion-dollar valuation.