WhiteHat Jr, an online education startup, is eyeing valuation of $350 million as it looks to ride on the boom in online learning, said three people aware of the development.
It currently provides live online coding classes to children in the age group of 6 to 14 and helps them build commercial-ready games, animations and apps.
The startup is currently in talks to raise $50 million at a valuation of $350 million — unprecedented for such a young firm — led by Singapore’s sovereign fund GIC and foreign hedge funds, people said.
The Economic Times earlier reported that private equity firm Multiples, GIC and Sequoia Capital were evaluating a stake in the startup.
WhiteHat was founded by Karan Bajaj, the former CEO of Discovery India, in late 2018. It is currently recording bookings of Rs 30-35 crore a month, the people cited above said.
Bajaj and GIC did not respond to emails seeking comment.
Their subscription packages are priced from Rs 6,000 to Rs 1 lakh, depending on the number of classes. It currently offers three packages of 8, 48 and 144 classes, respectively.
While the company targeted Indian school-going students to begin with, it has also found traction in the US, bagging over 20,000 paid subscribers.
"Investors are finding WhiteHat attractive because it is profitable and growing fast. Going abroad is also a great opportunity because parents' willingness to spend is far higher," said a person aware of the development on condition of anonymity.
Its India business could have limited scale in the long run because not all parents, especially in smaller towns, would see the value of relatively expensive coding classes at an early age.
Perhaps with this in mind, US revenues will account for 60 percent of WhiteHat's total revenues in June, Bajaj told Press Trust of India in an interview last week.
While online education has been an investor favourite in the last few years, COVID-19 outbreak has turbo-charged this trend because physical classes have become a casualty.
Startups such as WhiteHat Jr., Unacademy, Vedantu and Byju’s Classes have all benefitted from this. For instance, Vedantu, which provides online classes for K-12 as well as competitive exams for engineering and medicine, witnessed an 80 percent month-on-month rise in its revenue in April and students consumed one billion minutes of videos on its platform.
However, not everyone is gung-ho about WhiteHat's potential because its market size is still unknown. For instance, coding classes may not be attractive to all students or their parents and its relatively high price in India remains a challenge.
The startup also records its bookings as revenue, although a lot of the bookings are for long-term courses.
Lack of clarity on completion of courses by all students and refunds status are sticking points, said an analyst on condition of anonymity.