Ed-tech unicorn Eruditus raises $150 mn at $3-bn valuation

Ed-tech unicorn Eruditus has raised a $150 million series F fundraise led by TPG’s The Rise Fund, with participation from existing investors Softbank Vision Fund 2, Leeds Illuminate, Accel, CPP Investments and the Chan Zuckerberg Initiative. The primary funding round reportedly values the company at $3 billion.

Eruditus, the parent company of Emeritus, says the fundraising comes amid the startup achieving profitability on a full-year basis. Eruditus raised funds after three years following a $350 million round via debt in March 2022 and $650 million via equity in August 2021.

Mumbai-based ed-tech company says it'll use the funds to invest in AI technology, expand its business serving governments and enterprises, and deepen its investments in the India and APAC regions.

Eruditus also eyes acquisitions and investments in future, which, it says, have contributed to impressive topline growth and expansion in strategic markets.

Avendus Capital was the exclusive financial advisor for the fundraise.

Eruditus says it is accelerating its investments in generative AI to provide enhanced learning solutions. As part of this, it has launched 'AI-powered tutors' for students and programs with partner schools. "The need for training in the age of AI is driving unprecedented demand for the company’s enterprise solutions that grew revenue 45% last year."

Steve Ellis, a Managing Partner of The Rise Funds, says Eruditus’ mission aligns with a core investing theme for The Rise Funds, which backs strong businesses opening pathways to high-quality education.

As part of The Rise Fund’s investment, TPG’s Simit Batra will join Eruditus’ board of directors. Eruditus claims to partner with over 80+ top-tier universities and offers over 700 professional learning programs. The Eruditus Group has more than 1,750 employees globally and offices in Mumbai, New Delhi, Shanghai, Singapore, Palo Alto, Mexico City, New York, Boston, London, and Dubai.

The TPG Rise platform has $19 billion in assets and is one of the world's largest private markets impact investing platforms.

Ashwin Damera, CEO, Eruditus and Emeritus, says: “In a rapidly evolving business environment, we have reimagined education by bringing programs from the world’s leading universities to learners around the globe.”

The Eruditus fundraising marks the second biggest fundraising in ed-tech after Physics Wallah, which on September 23, 2024, raised $210 million at a $2.8 billion valuation. By September 4, 2024, the Indian ed-tech sector raised $215 million, showing a modest rebound from the $321 million secured in 2023, according to market intelligence firm Tracxn data. However, this is still a long way from the sector’s peak in 2021, when it raised $4.1 billion. The 2023 figure marked an 87% drop from the $2.4 billion raised in 2022, reflecting the sector's continued decline.

In the overall startup ecosystem, after a positive momentum for the first six months of the calendar year, funding secured by Indian startups dropped 7% year-on-year in nine months till September 2024. With 1,36,000 startups and 99 unicorns, India ranks 4th globally in funding, behind the U.S., UK and China.