Zuckerberg couple invests in edtech start-up Eruditus

Facebook founder and CEO Mark Zuckerberg and wife Priscilla Chan’s philanthropic organisation, the Chan Zuckerberg Initiative, has invested in education technology startup Eruditus, its second capital infusion into an Indian firm.

People close to the development said that the funding is part of Eruditus’ ongoing Series D round that will see the company raising around $100 million at a post-money valuation of about $800 million.

The Chan Zuckerberg Initiative (CZI) confirmed it had invested in the Mumbai-based startup, without disclosing details.

“Eruditus has a proven track record of increasing access to education globally in partnership with leading universities,” said Vivian Wu, Managing Partner, Ventures at CZI.

“We are particularly excited about their continued innovation in bringing these high-quality programs to emerging markets, in local languages and with top regional universities,” Wu added.

The deal, which will close soon, is expected to double its valuation from the $400 million in January 2019, when it had raised $40 million led by Sequoia India.

It will also make the executive education firm among the top valued ed-tech startups in the country.

CZI has backed ed-tech startup Byju’s in 2016, its first investment in the country and Asia. Since then, Byju’s has gone on to become a decacorn (with valuations of over $10 billion), having raised $545 million since the start of 2020 alone. CZI made a partial exit from Byju’s earlier this year, raking in around Rs 200 crore.

Its latest investment in Eruditus comes amid high growth, partially boosted by the Covid-19 pandemic, and the company’s path to profitability.

Damera told the press that the company had been profitable in the April-June quarter, and expects to post a “substantial profit” in its fiscal year ending June 30, 2021.

“We haven’t seen 3X or 5X growth like others because we do a paid product and our price points are higher, but we’re doubling,” said Damera. “Last year, we did $100 million in revenues, this year we will do $200 million.”

Eruditus’ online only courses have seen growth more than double in the course of the pandemic, making up for drying revenues from courses that had an offline classroom component. Eruditus said it used to earn 25% of its revenues from blended courses that offered in-campus learning, which is completely shut now.

Eruditus is the latest in a line of large ed-tech players seeing increased investor interest, leading to favourable valuations.

Byju’s saw its valuation increase from around $6 billion last year to $8 billion in January and $10.5 billion in June. Live online learning platform Vedantu also saw its valuation soar to $600 million, while Unacademy is in talks with SoftBank to raise capital at a $1.3 billion valuation.