Vedantu Bags INR 19.25 Cr In A Mix Of Debt & Equity

Vedantu Acquires Test Prep Platform Deeksha For $40 Mn To Strengthen Offline Presence

SUMMARY

Vedantu has secured INR 19.25 Cr ($2.4 Mn) in a mix of debt and equity financing from Stride Ventures Debt Fund II.

While INR 17.5 Cr was raised in debt, the remaining INR 1.75 Cr was in equity.

Vedantu's operating revenue stood at INR 152.5 Cr in FY23, down 8% from INR 166 Cr in the previous year.

Bengaluru-based edtech startup Vedantu has secured INR 19.25 Cr ($2.4 Mn) in a mix of debt and equity financing from Stride Ventures Debt Fund II.

While 1,750 unlisted, secured, redeemable non-convertible debentures (NCD) of face value of INR 1 lakh each was proposed to raise INR 17.5 Cr, the remaining INR 1.75 Cr was secured against issuing 4,968 series E2 partly paid up compulsory convertible preference shares(CCPS) at an issue price of INR 3,522.80 per share, as per the company’s filing.

Vedantu’s loss declined 46% to INR 372.6 Cr in the financial year 2022-23 (FY23) from INR 696.2 Cr in the previous fiscal year.

However, the startup also saw a decline in its revenue from operations during the year under review. Its operating revenue stood at INR 152.5 Cr in FY23, down 8% from INR 166 Cr in the previous year.

Founded in 2014 by Vamsi Krishna, Anand Prakash, and Pulkit Jain, Vedantu offers courses through online and offline medium.

The startup offers tuition to school students and also courses for NEET and JEE entrance exams. It has also started offering curated courses for kids 4 to 12 years of age.

It entered the coveted unicorn club in 2021 after raising $100 Mn in its Series E funding round from Temasek-backed private equity firm ABC World Asia, along with participation from existing investors Coatue Management, Tiger Global, GGV Capital and WestBridge.

It is pertinent to note that the fundraising comes against the backdrop of the Indian edtech sector undergoing a massive funding crunch.

Unlike the tendency shown by VCs and PEs before the pandemic wherein they infused billions of dollars during the height of the pandemic, the segment has witnessed a waning interest of the investor as the schools and colleges opened post-lockdown.

Besides this, a slew of issues within the startups in the sector made the matter worse. This issue included heavy cash burn, mounting losses, and weak governance guardrails, among other issues.

According to Inc42’s Indian Tech Startup Funding Report 2023, the Indian edtech startups raised $283 Mn in 2023 against $2.4 Bn in 2022, accounting for a massive 88% year-on-year (YoY) decline. The number of deals also plummeted 45.91% YoY to 139 in 2023 from 257 in 2022.