The Private Shares Fund Cuts Eruditus’ Valuation To $2.9 Bn

SUMMARY

The Private Shares Fund has cut the fair value of Eruditus by 9% in the March quarter

The firm is an investor through a Special Purpose Vehicle (SPV) of one of Eruditus’ venture capital and private equity investors

Eruditus joins the growing list of Indian unicorns, including the likes of Swiggy, BYJU’S, PharmEasy, which have been marked down in the recent months

As valuation markdown continues plaguing Indian unicorns, edtech unicorn Eruditus has joined the growing list. US-based The Private Shares Fund has cut the fair value of Eruditus by 8.56% in the March quarter.

The Private Shares Fund has a 0.2% stake in Eruditus. It has pegged the fair value of its 36,264 shares in the edtech firm at $4.66 Mn. From the fund’s 0.2% stake, Eruditus’ value stands at $2.9 Bn, down from its previous valuation of $3.2 Bn.

The Private Shares Fund is an investor through a Special Purpose Vehicle (SPV) of one of Eruditus’ venture capital and private equity investors.

Founded in 2010 by Chaitanya Kalipatnapu and Ashwin Damera, Eruditus offers courses from Indian institutions like IIM Kozhikode, IIM Lucknow, and more. It also has associations with institutions such as Harvard Business School, MIT, Columbia, UC Berkeley, and London Business School, among others.

Eruditus’ consolidated net loss rose 46% year-on-year (YoY) to $386.8 Mn in the year ended June 30, 2022 (FY22), as its marketing expenses more than doubled during the year.

Eruditus’ operating revenue jumped 1.8X to $245.2 Mn in FY22 from $131.2 Mn in the prior fiscal year. In FY22, Eruditus’ total expenses jumped almost 80% to $710.4 Mn from $397.3 Mn in the previous year.

However, in a recent interaction with Inc42, cofounder and CEO Damera, said that Emeritus would become profitable this quarter (April-June) on the back of the startup’s enterprise business’ 3X growth between 2020 and 2022.

Since its launch in 2010, the edtech unicorn has raised close to $800 Mn in funding and counts Accel US, Softabank, Leeds Illuminate and Prosus Ventures. among its investors.

In the last one year, many global investors have marked down the valuation of their portfolio startups. SoftBank, in September 2022, slashed the valuation of the hospitality major in its book by as much as 20%. Hot on the heels of this markdown, Prosus internally marked down the valuation of one of India’s most valued unicorn, BYJU’S, by a whopping 73% in November. BYJU’S minority investor BlackRock slashed its valuation by nearly half to $11.5 Bn in April, down from $22 Bn.

Earlier this month, US-based investment firm Vanguard Group clipped the valuation of ride-hailing unicorn Ola for the third time by 35% from $7.4 Bn to $4.8 Bn.

The development was first reported by Moneycontrol.