Bengaluru-based edtech startup Vedantu which specializes in K12 live online tutoring said Thursday it had raised a USD 42 million Series C round led by Tiger Global and WestBridge Capital in the latest testament to the country’s resurgent edtech boom that is bouncing back from a dip two years ago.
Other investors involved in the round include venture capitals Accel Partners and Omidyar India, in addition to Chinese unicorn TAL Education, among others. The startup has raised a total of almost USD 60 million to date.
The new funding will be used to expand into more cities and acquire more users, as well as beef up the technology and study content on its platform. It claims to be the first one of its kind in India to utilize AI and ML in an online learning experience.
Vedantu offers two main types of learning experience on its platform.
First, there is online one-on-one and one-on-many live tutoring for students fall under the bracket of class 4 to class 12, those who are studying Indian Certificate of Secondary Education (ICSE) and Central Board of Secondary Education (CBSE) curriculum across India and the Middle East. Subjects covered on the platform range from science, mathematics, English, Hindi to environmental and social science.
In the live sessions, students are prompted to take intermittent quizzes. Vedantu’s platform will track how much time a student needs to answer the questions to gauge the student’s familiarity with a topic, and then provide more quizzes from the topics that require additional practices with alerts sent to the teachers to follow up.
Selling subscriptions to these live and interactive tutoring sessions is the company’s main revenue source. The price ranges from USD 1.4 for a specific topic or USD 700 for long-term subscription, the company’s co-founder and CEO Vamsi Krishna told TechCrunch in an interview. It has more than 30,000 paying subscribers and more than half of them are from small towns.
On the other hand, Vedantu also provides a wide range of recorded courses which are free to use. More than 80% of users accessing its recorded and free content are from tier 2 and smaller cities.
The company boasts of more than 15 million users from over 1,000 cities across 30 plus countries. It also claims north of 500 teachers on its platform.
Vedantu has a tough competition ahead in the world’s second-most populous country with its local rivals, such as Byju’s, one of the world’s most valuable edtech startup with more than 2.4 million paid subscribers out of 30 million users. The company is valued at more than USD 6 billion.
There are two other competitors, Toppr and Unacademy. The four of them took in 77% of the total funding between 2014 and 2018 into the edtech space.
India’s online education market is coming back from a short dormant resulting from a mix of factors such as the then world economic uncertainty and the country’s own demonetization a few years ago.
India has one of the largest school-going population coupled with the parents’ willingness to invest in education. In contrast, there is a “shortfall in the number of schools, colleges, and universities as the shortage on the skills development side,” according to a report by accountancy firm EY. The gap gives rise to the country’s edtech startups that are tapping into the huge potential. The accountancy believes there is “an under-penetrated market in the edtech space and ripe for disruption and investments.”
Beyond K12 and online tutoring, PE and VC firms are also looking at other verticals such as open online courses, reskilling/upskilling program generators. “There is also a burgeoning digital skill divide in our country and edtech companies are starting to step in to reduce the gap,” the report says.