Bengaluru-based edtech firm Vedantu has raised $11 million (about Rs 98 crore) in fresh capital from existing investors, including ABC World Asia, Accel India and Omidyar Network, the company said on September 26.
The convertible round is part of a larger ongoing fundraise, with the company preparing for an external tranche that will include a “significant secondary component” to offer exits for some early investors, including Chinese backers such as TAL Education and Legend Capital.
Cushion ahead of IPO
Vedantu co-founder and CEO Vamsi Krishna said the raise was meant to give the company flexibility as it moves closer to its listing plans. “The internal round is not really going to be used for growth capital since we are already cashflow positive. It is more of a cushion as we near our IPO,” he told Moneycontrol.
“Before our IPO, which is expected in calendar year 2027, there is some cap table cleaning up which we need to do. There are some investors we are thinking of bringing in to give some of our Chinese and early investors an exit. Conversations are still ongoing."
Valuation and funding history
The valuation will be based on terms agreed with external investors and is expected to come at a discount to Vedantu’s peak unicorn status.
According to Tracxn, the company has raised $326 million across 18 equity rounds, so far, and is valued at $912 million.
Its last major fundraise was in September 2021, when it raised $100 million from ABC World Asia and other backers, including Coatue, Tiger Global, GGV Capital and WestBridge. Since then, the company has tapped a few smaller debt rounds.
Omidyar Network, which has exited India, continues to back a handful of high-conviction companies with IPO visibility, Vedantu is one of them.
Profitability milestone
The funding comes as Vedantu reports its first stretch of sustained profitability. It turned cashflow positive in Q4 FY25, posting Rs 90 crore in collections, up 67 percent year-on-year, with more than Rs 6 crore in free cash flow.
The company clocked Rs 110 crore in collections in April–June this year, its seasonal peak, and expects to close FY26 with around Rs 370 crore, a 30 percent growth, Krishna said.
For FY25, collections rose 55 percent to Rs 284 crore, while cash burn was cut by 30 percent to Rs 70 crore. Vedantu has now been profitable for six months. The company generates 60 percent of its revenue from online channels, with the rest coming from offline.
Vedantu’s online K-12 business grew 33 percent in FY25, with growth accelerating to 70 percent in the last two quarters.
Hybrid bets, acquisitions and sector recovery
Vedantu has expanded its offline footprint to more than 100 hybrid centres and is onboarding franchise partners. The company is also scouting for acquisitions in the K-12 space, which Krishna described as “strategic buys to add revenue”.
The raise also comes at a time when edtech funding has been scarce, following governance issues at companies like Byju’s and Unacademy, particularly in the K-12 segment. But the tide seems to be turning.
PhysicWallah has filed for an IPO, and firms like Eruditus and Bhanzu have also raised capital.
Krishna said Vedantu’s fundraise was another sign of sentiment improving. “We are slowly seeing investor interest coming back, and this round is a testament to that. This is among the few capital infusions announced by a large edtech firm over the last few years, which is an indication of some order happening, at least in the K-12 sector,” he said.
What next?
With 10 million monthly users, 1,200 teachers and 2 lakh paid students, Vedantu plans to expand in K-10 and test preparation while entering newer verticals. The company continues to see its hybrid model — now contributing 40 percent to revenue — as a key growth lever.
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