SoftBank, Canada Pension Board Eye Significant Investment In India's Edtech Giant Eruditus
SoftBank and the Canada Pension Plan Investment Board are reportedly considering an investment in Eruditus, a prominent upskilling and higher education platform in India. Eruditus is aiming to secure around USD 120-150 million in funding, which would include a combination of fresh financing and secondary fund infusion.
Approximately half of this funding is expected to come from secondary share sales, where new investors purchase existing stakes without direct capital injection into the company. The secondary round is anticipated to value Eruditus at around USD 2.5 billion, representing a 20 per cent discount from its previous valuation of USD 3.2 billion. The investment bank Avendus is advising Eruditus on this potential deal.
Both SoftBank and the Canada Pension Plan Investment Board are existing investors in Eruditus. The secondary funding round may also attract interest from a sovereign wealth fund, and some of Eruditus' initial US-based investors are looking to exit due to prior commitments. The edtech sector in India has faced challenges in securing investments, with concerns about the size of the online learning market post-Covid. However, higher education and upskilling platforms like Eruditus have fared better compared to those focused on K-12 and test preparation.
For SoftBank, this investment in Eruditus represents a departure from its reduced investment activity in 2023, aligning with its strategy of reinvesting in existing portfolio companies rather than pursuing new opportunities. Eruditus is also exploring options for financing through credit instruments or convertibles to strengthen its position for potential mergers and acquisitions. Jared Kushner's Affinity Partners has reportedly shown interest in investing through convertibles. Ultimately, the company is looking to secure financing to support its growth and potentially refinance its debt.
Eruditus, founded in 2010, provides educational programs for working professionals and has received over USD 814 million in equity funding from investors such as SoftBank, Prosus, Sequoia, the Chan Zuckerberg Initiative, and more. In August 2021, the company raised $650 million at a valuation exceeding USD 3.2 billion. Since then, it has not raised additional equity funding.
