Eruditus, a prominent player in the edtech sector, has successfully raised $150 million in a new funding round, led by TPG Rise, a US-based impact investment fund. This round also saw participation from existing investors such as SoftBank Vision Fund 2, Leeds Illuminate, Accel, CPP Investments, and the Chan Zuckerberg Initiative. The fresh funds come at a flat valuation of $3.2 billion post-money, positioning Eruditus as a key contender in India’s booming edtech industry.
In a significant strategic move, Eruditus has announced plans to shift its domicile from Singapore to India, a decision in line with several other Indian startups making a similar transition.
Eruditus Emerges as India’s Largest Edtech Firm by Revenue
Eruditus is now India’s largest edtech firm by revenue, with its income reaching Rs 3,800 crore in FY24. The company is on track to exceed Rs 5,000 crore this fiscal year, according to its founder, Ashwin Damera. These impressive financial results reflect the company’s strong positioning in the executive education sector, with its growth attributed to expanding university partnerships and diversification into various educational programs.
Funding and Investor Support
TPG Rise contributed $100 million to this funding round, while SoftBank added another $20 million, reflecting continued confidence in Eruditus’ growth trajectory. The company’s ability to attract significant investments comes despite global concerns about the edtech sector in India, especially following the high-profile troubles of Byju’s. Damera acknowledges that this funding round took longer to close than expected, largely due to ongoing global skepticism about the edtech space in India.
Damera also noted that while some investors hesitated due to uncertainties in the education sector or reluctance to invest in India, Eruditus spent considerable time reassuring them of its strong corporate governance practices.
Flipping Domicile to India: A Strategic Decision
The decision to move Eruditus’ domicile from Singapore to India is part of a broader trend among Indian startups to bring their headquarters back to the country. Eruditus aims to join the league of Indian companies that are flipping their domicile as part of a long-term strategy, particularly with an eye on a potential public listing in the coming years.
Damera revealed that the firm is planning for an IPO within the next two years and expects to go public at a significantly higher valuation. He added that achieving Rs 15,000 crore topline revenue would be a crucial milestone for the company’s IPO plans.
Expansion Plans: Scaling Beyond Executive Education
Eruditus plans to use the fresh funding for various expansion initiatives. While the company’s core focus remains executive education, Damera outlined ambitions to expand into postgraduate and undergraduate education programs. Eruditus will also enhance its study-abroad offerings, introduce new courses, and increase the number of university partnerships from its current 80 to 150 in the coming years.
The company’s long-term goal is to achieve 25-30% year-on-year growth. With this conservative growth rate, Damera predicts a future topline revenue of Rs 15,000 crore, a crucial factor for its IPO aspirations.
Addressing Debt and Financial Stability
Though Eruditus holds some debt, Damera emphasized that there is no immediate need to repay it. The debt payments are scheduled over the next two years, and Damera reassured investors that some debt is not detrimental for a company of Eruditus’ size. The company’s robust cash flow and strong financial performance have placed it in a comfortable position to service any liabilities without strain.
Eruditus’ Profitability and Path to IPO
Eruditus has now turned profitable at the EBITDA level, a significant milestone for the company. Damera highlighted that the company’s profitability, coupled with its strong topline growth, puts it in an excellent position for future success. With Rs 300 crore in projected EBITDA for FY25, Eruditus is poised to maintain its leadership position in the Indian edtech space.
Despite the global headwinds facing the edtech sector, Eruditus has continued to thrive. Damera is confident that when the company eventually lists on the stock exchange, it will do so at a much higher multiple, further boosting its valuation and market position.
A Bright Future for Indian Edtech
Eruditus’ latest funding round comes at a time when several edtech companies in India are facing challenges. The collapse of smaller edtech firms and the ongoing struggles of Byju’s have cast a shadow over the sector. However, Eruditus stands out as a resilient player, with its strong financials, strategic growth plans, and continued investor confidence setting it apart.
The edtech giant’s future appears bright as it looks to further consolidate its market position, expand its offerings, and ultimately list on the stock exchange at a higher valuation. Eruditus’ success also highlights the growing demand for executive education and the rising potential of India’s edtech industry as a whole.
Conclusion: A New Chapter for Eruditus
Eruditus’ $150 million funding round, led by TPG Rise, marks a significant milestone in the company’s journey. With a strategic decision to flip its domicile to India and ambitious expansion plans, Eruditus is well on its way to becoming a dominant force in the global edtech industry. As the company prepares for an IPO in the coming years, its continued focus on growth, profitability, and innovation will be key to its success.
For investors and stakeholders, Eruditus remains a promising edtech firm that is navigating the complexities of the sector with confidence and foresight.
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