Mumbai-headquartered edtech startup, Eruditus’s subsidiary Emeritus has secured $350 million in a debt financing deal from Canada Pension Plan Investment Board (CPPIB) to expand its merger and acquisition plans in global markets.
The startup, which develops executive education after OYO, Ola and Byju’s, is the fourth prominent startup that has raised a significant chunk of funds through debt financing. Emeritus, would also look at raising equity capital after this debt financing in the second half of 2022, costing them between $200 to $300 million.
Ashwin Damera, Co-founder and CEO, Emeritus and Eruditus, said, “Emeritus [Eruditus] will expand our mission of making education accessible around the world by deepening our investment in the education space to reach different segments and audiences. Our acquisition pipeline will enable us to accelerate growth, impact more learners, and improve our profitability.”
Edtech startup riding high on remote learning boom
Eruditus was founded in 2010 by Chaitanya Kalipatnapu and Ashwin Damera and formed their online division, Emeritus, in 2014. With the capital infusion of last year, the company’s valuation quadrupled from $800 million to $3.2 billion, making it the 22nd Unicorn of 2021.
As remote learning continues to boom from the pandemic, Emeritus is growing and innovating to meet market demand. With a year-on-year growth rate of 120 percent, Emeritus estimates gross bookings of $500 million for the financial year.
As the company grows 2.5x organically, Emeritus will also accelerate growth through inorganic initiatives. The pipeline of potential acquisitions is expected to contribute up to 30 percent of Emeritus’ top-line and EBITDA in the next five years, the company said.
The edtech firm said that after completing the debt financing, Emeritus will have raised more than $1 billion in debt and equity. CPPIB Investments also participated in Emeritus’ $650 million funding round in August 2021.
“The investment in Emeritus demonstrates our continued commitment to support industry leaders in India, one of our key markets in the Asia Pacific,” said Raymond Chan, Managing Director, Head of APAC Credit, CPPIB Investments.
“The investment is also aligned with our strategy of pursuing high-quality credit investments across the Asia Pacific and delivering attractive risk-adjusted returns for our contributors and beneficiaries,” Chan added.
The startup is backed by Accel US and Masayoshi Son-led SoftBank Vision Fund II and Chan Zuckerberg Initiative (CZI), a non-profit organization headed by Facebook CEO Mark Zuckerberg and his wife Priscilla Chan, claims to reach learners in more than 80 countries and offering programs through partnerships with more than 50 of the world’s top universities.