Vedantu raises $11M via internal convertible notes to bolster growth
Funds target AI-driven personalisation, hybrid centres, and category expansion
Capital also aims to tidy cap table and enable legacy investor exits
Bridge financing positions Vedantu for a larger external round and IPO
Bengaluru-based start-up Vedantu on Friday said it has secured $11 million through convertible notes from its internal investors as part of a larger, ongoing financing round.
The round was led by ABC World Asia, a Temasek backed fund along with other existing investors, including Accel India and Omidyar Network, participating.
The edtech firm says the investment is a vote of confidence that will be used to accelerate category expansion, invest in AI-driven personalisation and tidy up its cap table ahead of a planned public listing.
Vedantu’s management described the internal raise as a bridge to a broader external primary and secondary round that is expected to include a sizeable secondary component. It is designed to provide exits to some earlier and legacy shareholders, including certain Chinese investors, as the company positions itself for a public market debut.
Fund Utilisation
Company executives said the fresh internal capital will be used to fund category expansion (both organic initiatives and strategic acquisitions), accelerate investments in AI and adaptive content to enhance personalisation, and further scale Vedantu’s hybrid centre rollout.
Management also flagged the secondary process as a priority to simplify the cap table and enable legacy investor exits ahead of a listing.
IPO Moves
Investor confidence is supported by Vedantu’s hybrid strategy. The company has been expanding its offline footprint and now operates more than 100 hybrid learning centres while onboarding franchise partners to deepen reach in semi-urban and smaller cities, a push management says complements its technology-first model and supports faster customer acquisition and retention.
Management reiterated ambitions to convert the momentum into a public listing: Vedantu is preparing its balance sheet and cap table with an eye on a future IPO window, with public-market plans widely reported in the media to be targeted in the next few years. Analysts and company statements have linked the funding and secondary process to steps needed to align shareholders ahead of that outcome.
Vedantu Financials
The fundraise follows a running streak of improving operating performance. Vedantu reported its first profitable quarter in Q4 FY25, posting collections of about Rs 90 crore, a 67% year-on-year jump, and generating more than Rs 6 crore in free cash flow for the quarter, milestones the company says put it on a sustained path to cash-positive operations.
For FY25, collections rose roughly 55% to around Rs 284 crore while cash burn was cut by about 30%.
Vedantu’s move comes as the K–12 and test-prep segment sees renewed interest from investors after a period of consolidation and adjustment across the Indian edtech sector.
The firm says its digital reach, millions of monthly users and a large YouTube presence, combined with a growing offline footprint, gives it a differentiated route to scale in semi-urban markets where hybrid models are gaining traction.
