Top venture capital, private equity and sovereign funds are evaluating a potential investment in Mumbai-based educational technology startup WhiteHat Jr, showcasing ongoing investor interest in one of the few sectors to have made headway despite the Covid-19 pandemic.
According to sources aware of the developments, GIC, the sovereign wealth fund of Singapore, Renuka Ramnath-led home-grown private equity firm Multiples Alternate Asset Management and marquee venture capital firm Sequoia Capital, are among those considering an investment in WhiteHat Jr, which is currently in the market to raise $50 million (about Rs 378 crore) in a fresh financing round.
The talks are still at an early stage, according to the sources.
When contacted, Sequoia Capital declined to comment, while GIC, Multiples PE and Karan Bajaj, chief executive of WhiteHat Jr, did not respond to emails till the time of going to press on Thursday.
If successful, this will be the first funding round by the 18-month-old company, which last raised capital in late 2019 from Silicon Valley-based investor Owl Ventures, Omidyar Network and Nexus Venture Partners. Till date, WhiteHat Jr has raised a shade over $11 million across its seed and Series A rounds.
Incidentally, San Francisco and Sand Hill Road-based Owl Ventures, an education-focused investment firm, is also a backer of Byju’s, India’s largest ed-tech company, having invested in July last year.
WhiteHat Jr, founded in 2018 by Bajaj, the former chief executive of Discovery Networks India, operates in the K-12 segment, teaching students to code, and helping them build commercial-ready games, animations and apps using the fundamentals of coding. The startup has developed a proprietary coding curriculum, focused on product creation, and imparts lessons through live, interactive online classes.
“There is certainly faster scaling up that’s taking place because of Covid-19. However, even post Covid-19, while there will be churn related to users, a lot of them will also stay on the platforms, which means there will be a higher ramp up of revenue, with very little cost of acquisition,” Ankur Pahwa, partner, EY, told ET.
The developments come at a time when investors have been flocking to India’s ed-tech startups, with schools and other educational institutions shutting down due to the Covid-19 pandemic and forced to transition to web and mobile platforms.
In February, General Atlantic and Facebook led a $110 million funding round in Unacademy, while Vedantu raised $24 million in funding from investors led by GGV Capital, along with existing backers.
Several industry watchers and executives said ed-tech firms are looking at the present situation like how fin-tech firms had viewed the government’s move to invalidate all large denomination banknotes in November 2016.