Vedantu eyes $10–15 million from existing backers via convertible equity
The company is looking to shore up capital as it chases full-year profitability and offline growth ahead of an initial public offering (IPO) over the next two years.
This comes at a time when new investments in edtech startups have slowed significantly, with founders and investors increasingly at odds over the valuation benchmarks set during the boom years of online learning in 2020–21.
Also read: Plenty of courtships, but no one's tying a knot in Indian edtech
'There continues to be a mismatch in valuation, so the company is in talks to raise a convertible equity round with most of its existing investors participating," said the first of the two persons cited earlier, both of whom spoke on the condition of anonymity. Existing investors include ABC World Asia, Accel, Tiger Global, WestBridge Capital, and Omidyar Network India.
Unlike traditional equity rounds, where investors receive shares immediately, convertible equity delays both the valuation and the issuance of shares, until typically a priced funding round or IPO. Convertible rounds have increased in the startup ecosystem, as it started to see more down rounds after the pandemic-led boom in tech valuations, where investors wanted to bet on companies at a lower valuation than the last round.
'Multiple conversations keep happening. Nothing is on paper. We continue to explore and engage people and can potentially look to raise at opportune terms. We have been receiving multiple inbounds because of our growth and profitable numbers," said Vamsi Krishna, co-founder and CEO of Vedantu, in response to Mint's queries.
Financial health
Founded in 2011, Vedantu is a hybrid test preparation platform that offers both online and offline learning, boosted by its acquisition of offline player Deeksha. The company became a unicorn in September 2021 after raising $100 million in a Series E round led by ABC World Asia.
The company has also regularly tapped venture debt from firms like Stride Ventures, Innoven Capital, and Alteria Capital, typically in the range of ₹8–15 crore, to support working capital needs.
The potential fundraise comes ahead of Vedantu's planned IPO of $150–200 million, targeted between late 2026 and 2027, aimed at providing exits to early investors and raising growth capital, as Mint reported earlier in March.
Vedantu's consolidated operating revenue rose 21% year-on-year to ₹184 crore in FY24, while losses narrowed by 58% to ₹157 crore. In FY25, the company reportedly achieved profitability in Q4, closing the year with ₹284 crore in revenue, up 55% from the previous year. It also reduced its cash burn by 30% to ₹70 crore.
Also read: After edtech crash, study-abroad was the bright spot. Now, it faces testing times
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