Indian Unicorns 2022: Vedantu Targets the K-12 Tuition Opportunity

The EdTech market in India is estimated to reach $126 billion in 2022 from $63 billion in 2016. K12 education market alone is expected to be $55 billion by 2022. The recent pandemic has accelerated the growth in the EdTech market with user base doubling from 45 million in 2019 to 90 million in April 2020. Analysts believe that the increasing adoption and availability of online tools will continue to accelerate the growth of this market in the coming years. Vedantu, is among the leading Unicorns in the market.

Vedantu’s Offerings

Founded in 2011 by Anand Prakash, Pulkit Jain, Saurabh Saxena, and Vamsi Krishna, Bangalore-based Vedantu is an e-learning company that features an online platform with real-time personalized learning. Prior to setting up Vedantu, the group founded Lakshya, a test preparation establishment center where they helped students take engineering entrance exams. Lakshya was acquired in 2012 by MT Educare, but the founders realized that the offline teaching model had limited scalability options.

The founders then went on to start Vedantu. They focused on developing technologies like whiteboard and audio, and a marketplace for teachers. Today, the platform connects tutors and students to provide real-time one-on-one teaching online. Besides audio-visual capabilities, they are working on developing facial expression reading algorithms that can drive better engagement and improved efficiency for all learning sessions. It is also using advanced analytics from these learning sessions to help improve its teachers’ capabilities. The company announced the acquisition of Instasolv last year to strengthen its offering of doubt-solving capabilities – a key aspect of online learning.

Vedantu has become a leading player in the K-12 LIVE tutoring space. It offers tutoring courses to young students aged 3 years to 18 years as well as preparation for competitive exams in India. It is expanding its teaching capabilities into newer verticals where it will offer other classes like English Speaking, Reading, and Coding. Recently, Vedantu announced its partnership with Fittr. The partnership will allow Fittr to host fitness classes on Vedantu’s platform, under the V-Nurture and Super School programs.

Each month, more than 35 million users access its platform through its app and web for free. It also has a YouTube channel, which has over 65 million views. Vedantu has expanded its reach to students through its dedicated TV Channels on Airtel TV and TATA Sky.

Vedantu’s Financials

Vedantu earns revenues by charging both students and teachers a fee. Its revenues have grown over 4x since 2020. It reported an annual revenue run rate of around $65 million for fiscal 2021. It hopes to become profitable in the next two years.

Vedantu has raised $290.9 million in 10 rounds of funding, led by GGV Capital, Tiger Global Management, WestBridge Capital, 9Unicorns Accelerator Fund, ABC World Asia, Coatue, and Omidyar Network. Its most recent round was held in September 2021, where it raised $100 million at a valuation of $1 billion. A round held in early 2020 had valued the company at $275 million.

EdTech companies are seeing an astronomical rise in valuation in India. These companies are able to attract their consumer bases at a younger age, and by offering additional courses – spanning private tuitions for school assignments to helping students with entrance examination preparation, they are able to retain their students for a much longer duration. This has also led to significant competition from players like Byju and Unacademy which are also competing for similar access. Vedantic valuation is most likely based on a $100 million+ projected revenue for 2022, in which case, $1 billion is not an unreasonable number. I also like the fact that it is aiming for profitability within a relatively short order instead of running red ink forever.

Photo Credit: Sasin Tipchai from Pixabay

This segment is a part in the series : Indian Unicorns 2022