3one4 Capital exits edtech startup Toddle with over 6X Return

• ByStartupStory     |    January 19, 2023

3one4 Capital, a venture capital (VC) firm, has exited Toddle, an early-stage edtech startup, with a 6.6X return on investment.

3one4 Capital, which invested around $200k-$250k in Toddle’s seed funding round in 2020, announced its exit earlier this week in a LinkedIn post, just days after the startup received $17 million in its Series A funding round led by Sequoia Capital India.

Tenacity Ventures, Trifecta Capital, and other existing investors such as Matrix Partners, Beenext, and Better Capital also participated in the funding round, which took place earlier this month.

“It was from an older fund that has been closed out in terms of investment.” So, we had a fair amount of clarity that we will not be participating in the further rounds in the company…” said Ramdasan.

“We are constantly balancing our portfolio and planning exit horizons per vintage.” “As with most top-tier VC firms, we are exiting 8–10 companies every year,” Ramdasan added.

Since its inception, Toddle has grown 7X in ARR and achieved several milestones, including 3X year-on-year (YoY) growth, an annual churn of only around 3%, onboarding over 800 customers across 100 countries, and achieving a Net Promoter Score (NPS) greater than 72.

In the social media post, 3one4 Capital said, “Toddle has also doubled its customer base every year.” In 2019, there were 50 paid schools. In 2021, it reached 400 paid schools and closed 2022 with 800 paying schools.” 

“In fact, in the entire edtech space, if you have to bet on one company, I would still say Toddle.” They grew phenomenally. “Also, because it’s a SaaS player, it is actually one of the few sustainable edtech models out there,” said Ramdasan.

Toddle is an education-focused SaaS platform founded in 2019 by Deepanshu Arora, Gautam Arora, Nikhil Poonawala, Misbah Jafary, and Parita Parekh. The startup claims to serve over 40,000 educators at over 1,500 schools in over 100 countries. Toddle’s growth trajectory has been fairly consistent, according to its former investor, 3one4 Capital.

It is worth noting that Toddle has managed to attract new investments and provide a 6X return to 3one4 Capital at a time when the majority of the country’s edtech players, including BYJU’s, Unacademy, Vedantu, and UpGrad, have resorted to mass layoffs and other business restructuring measures.

According to Inc42 data, despite overall startup funding declining 40% year on year in 2022, Indian edtech startups raised $2.6 billion in the year, compared to $4.7 billion in 2021. Since last year, edtech startups have also laid off nearly 8,000 employees.

Follow Startup Story