Ed-tech start-ups raise funds for scale, geography expansion

The increasing PE/VC interest in the ed-tech space has resulted in many companies getting acquired by their larger peers or raising funds

Education technology start-ups are increasingly raising funds as they focus on scaling their business in India.

Jaipur-based Intellipaat Software Solutions plans to raise Series A fund to the tune of $3-5 million (Rs 19-32 crore), as it build technology to scale nationally and subsequently into other countries. The bootstrapped company builds online courses for engineers who need to build expertise in technologies such as Hadoop and Big Data.

“We have grown more than 1,000 percent,” said Diwakar Chittora, CEO, Intellipaat. The company, set up in 2011, offers over 80 courses to IT professionals and has large clients that include firms such as Genpact, Ericsson, Sony, CISCO, TCS, Wipro, and Tata Communications. It now has over 200,000 users.

START-UP STRATEGIES

• Jaipur-based Intellipaat Software Solutions plans to raise Series A fund to the tune of $3-5 million
• The company builds online courses for engineers who need to build expertise in technologies such as Hadoop and Big Data
• Vamsi Krishna, CEO & Founder, Vedantu says the Indian online market is all set to grow
• Better bandwidth and cheaper hardware allows ed-tech companies to provide high-quality education to consumers in a democratic manner
• Investors expect ed-tech firms to take advantage of trends such as mobility, user-generated content

The increasing PE/VC interest in the edtech space has resulted in a many companies getting acquired by their larger peers or raising funds.

In May, SAIF Partners and Helion Ventures invested $10 million or Rs 62 crore in Toppr, an online test preparation platform. Vedantu, an online personal tutoring platform, had raised $5 million or Rs 31 crore in Series A from Accel and Tiger Global. On Tuesday, another ed-tech company, iDreamCareer.com had raised its second round of angel capital through ah! Ventures. The Delhi-based start-up helps students in career planning through a combination of assessment tools and recommendations.

“Technology allows instant feedback and analytics across a large population which is not possible in traditional world. Given that education is also a large essential spend, this lethal prospect of disrupting a large sector is attracting PE/VC to education space,” said Rahul Chowdhri, Partner, Helion Ventures, on the increasing PE/VC interest in the segment.

While the huge market in India is obviously attracting a lot of individuals to start their entrepreneur journeys in the space, a strong urge for customised and personalised education is also gaining much interest.

“India’s online education market is estimated at $20 billion currently, and is set to grow up to $40 billion by 2017,” said Vamsi Krishna, CEO & Founder, Vedantu.

“We can confidently say that this huge potential is because consumers want personalisation and democratisation in the learning model from the huge talent pool of teachers available in the country. We see it complementing the traditional classroom format and opening newer avenues like the market place model, for both, the students and mentors,” he added.

Another reason is to change the inequalities and backwardness in the education space in India. Better bandwidth and cheaper hardware allows ed-tech companies to provide high quality education to consumers in a democratic manner.

Investors expect edtech companies to take advantage of trends such as mobility, gamification, user generated content and adaptive platforms. “This is likely to span across k5, k10, test-prep, higher Ed and working professional space,” Vamsi said.