News Update

Private Shares Fund Lowers Eruditus’ Fair Value by 9%, Valuation at $2.9 Billion

• ByStartupStory     |    May 29, 2023

Private Shares Fund, based in the US, has reduced the valuation of its ownership in edtech unicorn Eruditus by 9%, bringing it down to $4.66 million. The revised valuation has led to Eruditus being valued at $2.9 billion, marking a decrease from its previous valuation of $3.2 billion during its $650 million funding round in August 2021. The updated information was disclosed in filings with the US Securities and Exchange Commission (SEC).

According to a recent SEC filing dated May 20, 2023, covering the period from January to March 2023, there has been a slight reduction in the fair value of edtech firm Eruditus. The filing reveals that the fair value now stands at $4.97 million, slightly lower than the initial investment cost of $5.1 million by the US fund. However, it is important to note that a separate SEC filing as of December 31, 2022, had already indicated a decrease in the fair value of Eruditus to $4.97 million.

In a noteworthy development, it was revealed that The Private Shares Fund holds a 0.2% stake in edtech firm Eruditus through a Special Purpose Vehicle associated with one of Eruditus’ venture capital and private equity investors. However, the report did not disclose the identity of the investors. This event aligns with a broader trend of declining valuations of Indian startups witnessed among US-based asset management firms.

In recent developments, BlackRock, a major investor in BYJU’S, made a substantial 50% reduction in the valuation of its stake in the edtech company, bringing it down to approximately $11.5 billion. Additionally, Baron Capital, an investor in Swiggy, recently decreased the value of its holdings in the food delivery company by 10% for the second time in three months, as reported by YourStory. Furthermore, US fund Neuberger Berman adjusted the valuations of its stake in healthtech firm Pharmeasy and fintech firm Pine Labs. These instances reflect a trend of decreasing valuations among Indian startups observed among prominent investment firms.

Eruditus, in the fiscal year 2022, achieved a remarkable 87% surge in operating revenue, reaching $245.2 million (approximately Rs 1,860 crore). This impressive performance solidified its position as the second-largest revenue-generating edtech company. However, alongside this significant revenue growth, Eruditus also experienced higher net losses. In FY22, the net losses totaled $348.95 million (around Rs 2,645 crore), reflecting a 32.1% increase compared to the previous year’s figure of $264.2 million (approximately Rs 2,174 crore). It’s worth noting that Eruditus follows a financial year spanning from July to June.

Established in 2010 by Ashwin Damera and Chaitanya Kalipatnapu, Eruditus specializes in delivering executive-level courses offered by renowned universities. The company has established partnerships with universities across the United States, Europe, Latin America, Southeast Asia, India, and China.

 

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