BENGALURU: Education technology company Eruditus, which provides
executive education courses
in collaboration with top universities like MIT and Harvard, has mopped up $113 million in funding from South Africa’s Prosus Ventures and PE firm Leeds Illuminate, besides Facebook co-founder
Mark Zuckerberg’s philanthropy firm
Chan Zuckerberg
Initiative.
The deal will see the valuation of Eruditus double to $800 million as compared to $410 million it was valued at the end of 2018 as
investor interest
in the sector reaches an all-time high with home learning.
The deal includes an investment of about $90 million in the business and about $20 million for purchase of shares from existing investors, including management of the company. The new round also saw the participation of existing backers including
Sequoia Capital
India and Ved Capital. After the round, Eruditus founders will own 55% of the company while investors will have 30%, with the remaining 15% with employees.
Interestingly, Eruditus expects to double its revenues in the ongoing financial year to $200 million from $100 million in the previous financial year, according to co-founder and CEO Ashwin Damera. Over 80% of its revenues come from overseas, with US and India accounting for half of the topline. Avendus Capital was the advisor to Eruditus on the deal.
Eruditus was profitable in the last quarter of the previous financial year, which for the 10-year-old company ends in June every year. It will be profitable in the coming financial year, according to Damera. According to him, about 20% of its revenues used to come from blended courses with offline learning, the number has now come to zero with the Covid-19 pandemic but increasing demand for online learning has more than made up.
Eruditus plans to use $25-30 million of the funding to create 120-150 new courses going forward, which takes about six months. "One of the criticisms of academics is that they don't teach subjects that the industry wants. But we are in the space of up-skilling and re-skilling, and work closely with HR professionals on what they want and work on how to teach in the best, hands-on manner," said Damera in an interview with TOI.
Investment in Eruditus comes as ed-tech startups like Unacademy is in talks to raise about $150 million from Softbank while Byju's, valued over $10 billion, has attracted funding from top investors like DST Global and Bond Capital this year.
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