Education

Eruditus will be larger than Coursera in the next 12 months: Ashwin Damera

Debangana Ghosh Mumbai | Updated on August 20, 2021

Co-Founder of the company says the company’s target revenue for 2022 is over $500 million

Upskilling start-up Eruditus entered the unicorn club last week with a bang, raising $650 million from Accel, SoftBank Vision Fund 2 and its existing investors in Series E round.

Eruditus today has 35 per cent of its business coming from the US, only 20 per cent from India and the rest from other markets. It is currently offering courses in English, Spanish, Portuguese, Mandarin and Arabic to connect better with its global learners. Ashwin Damera, Co-Founder of the company spoke with BusinessLine his long-term plans to innovate and scale up the start-up.

You raised $650 million in a single round. What was your pitch to the investors for such a massive fund raise?

Investors like three things: market leadership, growth, potential for future growth and unit economics.

We are the largest start-up in the higher education space coming from India, much higher than UpGrad and Great Learning. On the global front, we will be larger than Coursera in the next 12 months. Our target revenue at over $500 million will be slightly higher than Coursera’s $389-400 million by 2022. At present, Coursera’s revenue is higher and it is a public company. In terms of growth, we have made $175 million in bookings revenue, this was around $93 million a year ago. We grew nearly 2x. We are growing faster than we did last year, on a higher base.

Is the company profitable and how do you plan to reach the target revenue?

The company broke even last quarter and from this year onwards the company is profitable. We are already at a $350-million revenue run rate. In the last 12 months, we have added 22 university partners, which is nearly the same we had added in the past seven years. At present, we have 52 university partners and 300 courses, and this is going to go up to 75 university partners and 550-600 courses respectively in the coming 12 months.

How do you plan to deploy the funds?

Last year in August 2020, we had a valuation of $780 million post money. This year it is $3.2 billion post money. Approximately a 4X valuation jump. Part of the funding raised will be used for M&As. The remaining will go into our course creation. Creating a new course involves $100,000 in capex, and we have 300 courses to come up which will involve $30 million capex in the next one year.

We are also looking at regional growth and introducing more languages across global markets. We are considering introducing our courses in French and German, but it is still early days.

For M&As, we are looking at expanding our B2B offering, which is currently 10 per cent of our business. We are now spending more time and focus on that. We are planning to offer newer specific subject certificate courses, for instance in English, cybersecurity, finance or real estate. If a company enables us to enter into these segments, we will be looking at acquiring them.

Are there any new innovative learning ideas in the pipeline?

In terms of trends, in the next 12 months we will be enrolling about 250,000 students. Our big milestone right now is to enrol 1 million students, for that we have to innovate on the product, even bring down price points. In India ₹30,000 is still a lot. So, we have recently launched a product called Emeritus Insights, which is a ₹7,000 subscription course. Users can learn from books and lectures from personalities like Anand Mahindra, Ratan Tata and Narayana Murthy. We have taken best from our courses and faculty and converted them into bite-sized 2-3 minute lectures for specific needs.

We are also looking at bite-sized, micro learning programmes. Apart from exploring newer languages, we are targeting pre-college students too, we recently acquired iD Tech which is into K-12 segment learning but very skill based. We want to look at what more can we do in terms of innovating higher education. We are looking at ways wherein students can do one year of college from India and the remaining three from the US or can someone do an entire degree course online.

Now that you are a unicorn, are you looking at an IPO in the coming years?

I am not even thinking about it! Whether it is an IPO or a buyback, my investors will get their exit. My current investor Bertelsmann took a partial exit in the latest round. My fundamental belief is don’t chase the outcome, chase the input metric, which is build a good business. If the metrics are right, there will be enough people who would want to invest be it through private or public investment.

Published on August 20, 2021

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