Vedantu is not up for sale, said co-founder and chief executive officer (CEO) Vamsi Krishna on a day that news website Entrackr reported the live tutoring startup was in talks with the edtech unicorn Byju’s for up to $800 million. Krishna said the company instead plans to announce a new fundraise this month. However, multiple persons told Mint on condition of anonymity that Byju’s did reach out to Vedantu last year and that the company plans to raise $100 million at a valuation of $1 billion. Edited excerpts from an interview with Krishna:
There are strong rumours about Vedantu being acquired by Byju’s. We would like your version.
We haven’t been reached out by Byju’s this year for an acquisition. We didn’t start Vedantu to get acquired or to chase high valuations. There were several acquisition offers last year that we haven’t considered seriously, or even taken to Vedantu’s board. Rumours of our acquisition come as a complete surprise, as we haven’t even had one direct conversation with anyone this year.
We (Vedantu founders) have been in the education industry for 15 years. If exit outcomes were so important to us, we wouldn’t have built Vedantu, or been in edtech.
At present, Vedantu is growing threefold year-on-year, and we have no reasons to get acquired. So, talk of our acquisition is just a figment of someone’s imagination. We continue to build Vedantu.
When do you expect to close your new fundraise?
We are in the midst of a new fundraise, at present. Since we still have to close it, we cannot disclose the quantum. However, we will announce it this month.
Will these rumours impact your current fundraise? What are you hearing from investors?
All our investors have been in the business for long and are used to these rumours. We are fortunate for their backing. Unfortunately, managing these rumours gets challenging, and we have received several calls from our vendors since morning.
Byju’s and Vedantu have common investors. How does that affect Vedantu?
The only common investor between us is Tiger Global, and so far we haven’t faced any challenges. Tiger has opted to not take a board seat in Vedantu, which as a practice they have followed for certain other investments as well. We value Tiger on our cap table, since they have backed several successful businesses in India.
With market dynamics choosing its leaders in edtech, has it been difficult to raise funds?
Agreed, there is competition, but there is also a large market up for grabs. With consolidation at play, there will be two to three market leaders left. Vedantu is a challenger brand, growing three to four times annually. Hence, we attract investors who care about growing their investments also 3X-4X. The return equations for most investors don’t make sense if they back startups with bloated valuations, and Vedantu is a lucrative option there. So, for the above reasons, there isn’t a challenge in fundraising as we continue to attract investors who expect much higher returns from us now.
With new funds coming in, what will Vedantu’s focus be? Will it enter newer markets of higher learning through acquisitions?
No, we will continue to focus on K-12 and deepen our offerings for the segment. We are always open to acquisitions, but our investments will be on improving teaching experiences, our reach and delivery of our courses as we look to improve outcomes for our students.
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