Bangalore, October 23, 2024: Vedantu, an edtech startup, has secured Rs 19.25 crore ($2.4 million) in a combination of debt and equity financing from Stride Ventures Debt Fund II.
The funding round includes Rs 17.5 crore raised through the issuance of 1,750 unlisted, secured, redeemable non-convertible debentures (NCDs) and an additional Rs 1.75 crore secured through the issuance of 4,968 series E2 partly paid-up compulsory convertible preference shares (CCPS).
Despite facing a decline in revenue from operations, Vedantu’s losses decreased by 46% in the financial year 2022-23 (FY23). The startup’s operating revenue stood at Rs 152.5 crore, down from Rs 166 crore in the previous year.
Founded in 2014, Vedantu offers a range of courses, including tuition for school students and preparation for NEET and JEE entrance exams. They have also expanded their offerings to include curated courses for children aged 4 to 12.
Vedantu achieved unicorn status in 2021 after raising $100 million in its Series E funding round. This latest fundraising comes amidst a challenging period for the Indian edtech sector, which has experienced a significant funding crunch.
Unlike the pre-pandemic trend of massive investments in edtech startups, the sector has witnessed a decline in investor interest following the reopening of schools and colleges. Several issues, such as heavy cash burn, mounting losses, and weak governance, have further contributed to this downturn.
According to Inc42’s Indian Tech Startup Funding Report 2023, Indian edtech startups raised only $283 million in 2023, a drastic 88% decrease from the $2.4 billion raised in 2022. The number of deals also plummeted by 45.91% year-over-year to 139 in 2023.