The company is eyeing a $150-200 million public debut between late 2026 and 2027 to provide early investors with an exit and raise capital for growth, co-founder and CEO Vamsi Krishna said.
“The moment we become profitable, an IPO becomes relevant for us, but we would want to go for an initial offering with at least ₹500 crore revenue threshold,” Krishna said.
The company’s consolidated operating revenue rose 21% year-on-year to ₹184 crore in FY24, while it reduced its losses by about 58% to ₹157 crore during this period.
Vedantu is estimating a 30% revenue growth in FY25 and expects 25- 35% revenue growth in the next 3-5 years, Vamsi said.
The company expects to see its first cash-flow positive quarter in January-March. Profitability has been a top priority for the company, as it wants to avoid the scenario where it requires funding to grow, Vamsi said.
“What we see internally is cash collections, and our growth of collections is going to be much more than what you will see being reported in the financials as revenue growth. In terms of collections, we should be touching close to ₹300 crore, growing by almost 75% in FY25,” he said.
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Offline expansion to fuel growth?
Vedantu, which started offline operations last year, said that the first year has been profitable for the segment. The company has opened 20 centres and all of those have been profitable in the first year of operations, Vamsi claimed.
The company, known for its live online tutoring for K-12 students, competitive exams, and skill development, plans to add about 8-9 more centres this year, Krishna said.
Unlike many edtech players that rushed into offline expansion over the past two years, Vedantu took a more measured approach. Krishna, who previously founded Lakshya Institute, a coaching company, credits his seven years of experience in the sector for shaping this strategy.
“Having done this whole thing for 6-7 years, we understand clearly that offline is not something which you just rush into as it involves a lot of capex and losses. If you have huge capital and you can take losses for 2-4 years, then it’s okay, but we were not in that position. We opened in those locations where we were clear that we would be able to do this,” he said.
Vedantu’s strategy focuses on smaller, distributed centres rather than big centres in metros.
Alongside offline growth, the company’s online business has continued to expand, seeing a 35% rise. Currently, the company’s online-to-offline revenue is 60-40%, and Krishna expects offline to grow to 60% in the near future. He believes the omnichannel play is something markets have taken well.
Vamsi’s comments come in the context of the edtech market having seen a downturn and a funding crunch in the last two years as investors became cautious with the turbulence at major players like Byju’s and Unacademy. As a result, startups that once raised capital with ease struggled to secure funds, forcing many to pivot, downsize, or shift focus to offline models.
The balance between online and offline expansion would be key, according to Anup Jain, founding partner, BlueGreen Ventures. “If they spend overly on either, it may erode path to profitability without necessarily igniting growth. Thus, the playbook that they have piloted and learnt on should not be deviated from,” the former managing partner at Orios Ventures said.
Before the IPO, the company would need to stabilise its offline operations as it would need high capex upfront, which can become a point of concern for the investors from a scalability standpoint, according to Anil Joshi, managing partner, Unicorn India Ventures, which has invested in edtech companies like ForeignAdmits.
“To the retail and institutional investors, who form a large chunk of IPO subscribers, the company should be able to address valuation-related concerns like business margins in offline operations and its impact on the growth trajectory of the company as compared to its online counterparts. If not addressed, this might lead to lower valuation multiples at the time of listing,” said Joshi.
Amit Nawka, technology deals partner at PwC India, told Mint that many edtech players are highly valued based on their last funding round, which puts them in a tough position in the next equity round.
Vedantu last raised $2.4 million in a mix of debt and equity from Stride Ventures in September 2024. The company’s valuation is $912 million as of September 2024, according to data firm Tracxn.
“If you go to the private markets again, then you have the overhang of questions like, what is the right valuation for this company, and so on,” he said. On the back of this, and with the Indian public markets delivering strong returns, some edtechs believe that an IPO is a more appealing option, Nawka added.
Niche focus
As Vedantu focuses on sustainable offline growth, it also plans to consolidate its new initiatives, including Vedantu Store and vernacular courses, launched this fiscal.
“There are primary products, which you typically purchase for the entire year. But there is a lot of demand we get for secondary products [that are not core offerings but enhance the educational experience]. We went very deep into this and launched the Vedantu Store,” said Krishna.
The company has also launched courses in a few regional languages and plans to cover more languages this year. “Last year we experimented, but this year we are going big into that,” Krishna said.
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