Eruditus nears deal to raise $150 million in fresh round led by TPG

Eruditus CEO and co-founder Ashwin Damera

Higher education and upskilling platform Eruditus is in advanced stages to raise $150 million in a fresh round led by TPG, according to people familiar with the matter.

The funding into an edtech startup comes despite the sector appearing to have lost its sheen in India, thanks to the downfall of Byju’s. The beleaguered startup, once the poster boy of Indian startups and the most valuable edtech in the world, is now grappling with issues to stay afloat even after raising a total of $5 billion. From being valued at $22 billion in 2022 to now struggling to raise $200 million at a valuation of a meagre $20 million, things have come undone for Byju’s.

Unacademy, another large edtech startup in the country, is reportedly scouting for buyers, underscoring stress in the Indian edtech sector. While Byju’s and Unacademy largely cater to the K-12 and test prep sectors, higher education platforms like Eruditus seem to be unfazed. That likely explains the continued investor interest in Eruditus.

“The discussions to raise money started sometime last year and the initial plan was just to do a small $50 million secondaries round where some early investors would take an exit. However, Eruditus after achieving a full year of Ebidta profitability decided to kick off a larger round and close it before flipping its base back from Singapore to India,” one of the people cited above told Moneycontrol.

Eruditus’ valuation will remain at around $3 billion after the round is complete.

SoftBank-backed Eruditus is planning to shift its domicile from Singapore to India over the next 12-18 months. “The idea is to close the TPG round before the process to flip back begins,” the person added.

TPG and Eruditus did not respond to Moneycontrol’s queries.

The fresh $150 million will be Eruditus’ first major equity round since August 2021. Back then, the company raised its largest-ever round of $650 million at a valuation of more than $3.2 billion. Since then, Eruditus has only secured debt from various institutions. In fact, in 2022, Eruditus received $350 million in debt from Canada Pension Plan Investment Board (CPPIB), a global investment management company, to fuel mergers and acquisitions and consolidate position in a red-hot market.

Once completed, this will mark the return of yet another large ticket fundraise (over $100 million) in the Indian startup ecosystem. Over the past months, Moneycontrol reported that large startups like Zepto, Meesho and others have raised large amounts of capital and signalled that while capital is available, investors are cherry picking companies and only backing companies that have demonstrated potential to grow further.

Improved financials

In line with its fundraising plans, Eruditus has grown in scale and reined in expenses which improved the bottom line.

The company’s operating revenue jumped to Rs 3,343 crore in FY23, up 70 percent from Rs 1.962 crore in FY22. At the same time, its losses reduced 66 percent from Rs 3,094 crore in FY22 to Rs 1,049 crore in FY23.

“FY24 is likely to be the first full year of earnings before interest, taxes, depreciation and amortisation (EBITDA) profitability for Eruditus,” a second person in the know told Moneycontrol. To be sure, the company is yet to close its FY24 books of accounts.

Eruditus’ holding entity is in Singapore and it follows a July-June financial year.

Founded in 2010 by Ashwin Damera and Chaitanya Kalipatnapu, Eruditus (Emeritus) is a platform that provides executive-level programmes for working professionals.

The company has raised over $814 million in equity funding to date, excluding the current $150 million ongoing round, and counts SoftBank, Prosus, Peak XV Partners (formerly Sequoia Capital India), Chan Zuckerberg Initiative, GSV Ventures among others as its backers.