Private Shares Fund marks down Eruditus’ fair value by 9%; valuation stands at $2.9B

US-based Private Shares Fund has slashed the valuation of its stake in edtech unicorn Eruditus by 9% to $4.66 million, according to filings with the US Securities and Exchange Commission (SEC).

The decrease in the value of the US fund's stake in the edtech company has resulted in Eruditus being valued at $2.9 billion, which is a decline from the $3.2 billion valuation when it raised $650 million in August 2021.

The recent SEC filing on May 20, 2023, is for the period January-March 2023. However, in another SEC filing, as of December 31, 2022, there was a slight decrease in the edtech firm's fair value to $4.97 million. The US fund’s initial cost of the investment in the company was $5.1 million.

Moneycontrol, the first to report on this development, highlighted that The Private Shares Fund owns a 0.2% stake in the edtech firm through a Special Purpose Vehicle linked to one of Eruditus' venture capital and private equity investors. However, the report did not disclose the name of the investors.

YourStory has reached out to Eruditus for a comment. This story will be updated with the company's response.

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This occurrence coincides with a trend of decreasing valuations of Indian startups observed among asset management firms based in the US.

Recently, BlackRock, one of the major investors in BYJU'S, significantly reduced the valuation of its stake in the edtech firm by 50%, bringing it down to approximately $11.5 billion.

Earlier this month, YourStory reported that Baron Capital, a prominent investor in Swiggy, slashed the value of its holding in the food delivery company by 10% for the second time in three months. Also, US fund Neuberger Berman took a haircut in the valuations of its stake in healthtech firm Pharmeasyand fintech firm Pine Labs.

In the fiscal year 2022, Eruditus witnessed a remarkable 87% growth in operating revenue, reaching $245.2 million (~Rs 1,860 crore), making it the second-largest revenue-generating edtech firm. 

However, along with this impressive revenue growth, Eruditus also recorded higher net loss. In FY22, its net losses amounted to $348.95 million (~Rs 2,645 crore), indicating a 32.1% rise from the previous year's $264.2 million (~Rs 2,174 crore). It follows a financial year from July to June.

Founded by Ashwin Damera and Chaitanya Kalipatnapu in 2010, Eruditus specialises in providing executive-level courses from top universities. The company has formed collaborations with universities spanning the US, Europe, Latin America, Southeast Asia, India, and China.

Eruditus has secured total funding amounting to $814 million through seven rounds of funding, according to Tracxn.