SoftBank-Backed Eruditus Gets $350 Mn Debt From CPPIB

Eruditus Gets $350 Mn Debt From CPPIB To Expand Acquisitions

SUMMARY

Other companies that have already raised debt funding include Byju’s, Udaan and Oyo Hotels & Homes

The startup would also look at raising equity capital after this debt financing in the second half of 2022, which could be between $200 Mn and $300 Mn

About one-fifth of its gross annual bookings are from India while the rest is divided across markets including Europe, the US, Latin America, among others

Edtech startup Eruditus has sealed a $350 Mn debt financing deal from Canada Pension Plan Investment Board (CPPIB) to expand its acquisition plans in overseas markets.

The CPPIB investment marks a new and growing trend among some of the largest Indian startups that have opted for different kinds of debt financing routes for expansion.

The fund will be used for two main acquisitions in the US and Europe. “The pipeline of potential acquisitions is expected to contribute up to 30% of Emeritus’ top line and EBITDA in the next five years,” the company said in a statement.

Eruditus further plans to expand its gross annual bookings by 90% to about $950 Mn in fiscal 2023, as against an estimated $500 Mn in this fiscal.

With a year-on-year growth rate of 120%, Emeritus estimates gross bookings of $500 Mn for the current financial year. The executive education-focussed startup is reported to be in the final stages of securing a $250 Mn acquisition in Europe, as per the ET report. The name of the company has not been disclosed yet but it offers online certificate courses to non-English speakers.

“Emeritus will expand our mission of making education accessible around the world by deepening our investment in the education space to reach different segments and audiences,” said Ashwin Damera, cofounder & CEO, Emeritus and Eruditus.“Our acquisition pipeline will enable us to accelerate growth, impact more learners, and improve our profitability.”

Eruditus was founded in 2010 by Chaitanya Kalipatnapu and Ashwin Damera. It provides executive education programmes with global business schools such as MIT, Columbia, Harvard Business School, INSEAD, Tuck at Dartmouth, Wharton, UC Berkeley and London Business School.

These programs are held for the period of six to eight months and can be available via on-campus, off-campus and online modes. It also offers courses from Indian institutions such as IIT Kozhikode, IIM Lucknow, and BML Munjal University, among others.

The startup is also backed by Chan Zuckerberg Initiative (CZI), a non-profit organisation headed by Facebook CEO Mark Zuckerberg and his wife Priscilla Chan.

In August last year, the Mumbai-based edtech startup raised $650 Mn funding led by Accel US and Masayoshi Son-led SoftBank Vision Fund II.

The capital infusion has quadrupled the valuation of Eruditus to $3.2 Bn from $800 Mn, making it the 22nd unicorn of 2021.

With Eruditus, India now has four edtech unicorns including BYJU’s and Unacademy. This is SoftBank’s second major bet in India’s edtech space. The Japanese fund is also a backer in Unacademy.

Last year in May, Eruditus made a $200 Mn acquisition for Silicon Valley-based edtech startup iD Tech in a cash deal. In FY21, the startup reached learners in about 80 countries and offered its programmes through partnerships with more than 50 universities across the world.