Eruditus is one of the world’s largest learning companies, providing executive-level programs aimed at arming working professionals with tools for success. It has announced that it is in the final stages of securing a $150 million investment from the eminent private equity firm TPG. This major investment is likely to allow the company to maintain its valuation at around $3 billion and testifies to the sustained confidence on the part of leading investors in higher education platforms, as other segments of the Indian edtech sector face a crisis.
PC: NewsBytes
The talks to raise this round started last year, and it was first intended to be a smaller $50M secondary offering in which the company itself stood to raise $25 million so early angel investors could take money off the table. Yet in going into a full year of EBITDA profitability, Eruditus has decided to supersize the round and bring in the type of marquee investor like TPG. A source said that all these 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 Ebitda profitability, decided to kick off a larger round and close it, before flipping its base back from Singapore to India.
This $150 million equity round is the first major round for Eruditus since August 2021, when the company raised $650 million at a valuation of over $3.2 billion. Since then, the company has essentially added to its balance sheet through debt, including $350 million from the Canada Pension Plan Investment Board in 2022 to support mergers and acquisitions.
If completed, it would also mark the return of big-ticket money inflows into the Indian startup system after recent large-ticket raises by Zepto and Meesho. The development suggested that although the investors remain selective, they are backing strong companies that have good growth potential.
Eruditus has been excessively growing in the last couple of years and has solidified its financial profile. Operating revenue for this company increased by 70% to Rs 3,343 crore in FY23 compared to Rs 1,962 crore in FY22. Simultaneously, Eruditus managed to reduce its losses by 66%, from Rs 3,094 crore in FY22 to Rs 1,049 crore in FY23.
A source who has seen the company’s financials said that “FY24 is likely to be the first full year of EBITDA profitable for Eruditus,” but the company is yet to close its books of accounts for predominantly the FY24 fiscal year.
The potential investment by TPG will continue to enable the company to further develop its technological capabilities, expand worldwide, and pursue other areas of growth. These can include furthering into additional verticals of professional education and corporate training for Eruditus—an expansion through potential acquisitions or strategic partners to augment the Eruditus offerings and reach.
Founded in 2010 by Ashwin Damera and Chaitanya Kalipatnapu, Eruditus has raised north of $814 million in equity funding to date, excluding the current $150 million round. Its backers include some of the best investors worldwide, led by SoftBank, Prosus, Peak XV Partners (previously Sequoia Capital India), the Chan Zuckerberg Initiative, and GSV Ventures.
Eruditus has received a funding round of $150 million from investors led by TPG, marking a huge milestone for the company while validating its strategic vision and execution globally in the professional education market. These investments put Eruditus in the fast lane and fortify the company’s lead among the big players in an edtech landscape that is rapidly growing, with other segments even facing some headwinds.
