Delhi-based educational-technology firm Transweb Educational Services Pvt. Ltd has raised its Series A round of funding from 500 Startups, a Silicon Valley-based startup accelerator and early-stage VC fund house.
The transaction was routed through 500 Startups IV LP, a $200 million seed fund managed by 500 Startups Management Co. LLC.
Transweb, which provides online tutorial services, has raised over Rs 80 lakh ($120,000) from the US-based firm on a fully diluted basis through a preferential allotment., according to VCCEdge, the data research platform of VCCircle, based on filings with the Registrar of Companies (ROC).
500 Startups has picked up 6.48% as part of the deal. BMR legal acted as legal adviser to the investor in the transaction.
The company, which was launched in 2006 by IIT Delhi alumni Aditya Singhal and Nishant Sinha, provides online tutoring services through its five websites—askIITians, eMedicaPrep, transtutors, transwebtutors and mycollegesabroad.
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When contacted, Singhal confirmed the development and said that the funding will be used for marketing of transtutors and increase its team strength. Transtutors is a question-and-answer format website for homework help.
Singhal said transtutors is venturing into Chartered Financial Analyst (CFA) coaching this year.
While Singhal had earlier served global management consulting firm Kurt Salmon Associates, the other co-founder and his batch-mate Sinha was previously working with retail consultancy firm Technopak before launching this venture.
An email query sent to 500 startups, however, didn’t elicit any immediate response.
While askIITians caters primarily to students preparing for engineering entrance exams like the Indian Institute of Technology Joint Entrance Examination (IIT-JEE) or All India Engineering Entrance Examination (AIEEE), eMedicaPrep reaches out to medical students taking entrance exams such as All India Pre Medical Test (AIPMT) or All India Institute of Medical Sciences (AIIMS).
On the other hand, Transwebtutors offers paid online tutoring in technical subjects and mycollegesabroad provides consulting for students planning to study abroad.
The company posted net sales of Rs 13.2 crore in FY2014-15 compared with Rs 10.4 crore a year before, according to VCCEdge. The financials for FY2015-16 couldn’t be immediately ascertained.
500 Startups fund
500 Startups was founded by former PayPal executive Dave McClure in 2010. Its network includes about 750 startups, 200 mentors and 1,000 entrepreneurs globally. The fund typically invests up to $250,000 in a company during the first leg. Its preferred sectors include financial services, gaming, payments SaaS, and education on mobile and web.
It has recently launched a $25 million regional fund focused on India, Sri Lanka and Bangladesh. The 500 Kulfi fund, as it is christened, is sector-agnostic but will focus on fin-tech, ed-tech, health and wellness, data analytics, content and software-as-a-service segments.
500 Startups has invested in about 50 companies in India since 2011 including ZipDial (acquired by Twitter), SourceEasy, Instamojo, CultureAlley, SilverPush, KartRocket and Headout.
Other deals in space
Investors betting on companies such as Transweb are seeking to benefit from the opportunity arising from the gap in demand and supply of jobs that is prompting millions of jobseekers to enroll into test prep centres to prepare for competitive exams.
“Disproportionate demand and limited supply forces students to approach these coaching centres,” said Narayanan Ramaswamy, partner and head of educational skill development sector advisory at KPMG in India.
The past two months have seen considerable activity in the ed-tech segment. Ed-tech startup Byju’s has recently raised $75 million from Sequoia India and Belgian investment firm Sofina.
Mohandas Pai and Aarin Capital seed-funded ed-tech startup Oust Labs Inc, which helps students prepare for competitive exams using mobile gaming technology.
Earlier this year, financial services and analytics education startup Imarticus Learning raised $1 million (around Rs 6.7 crore) from a group of investors including VC fund Blinc Advisors.
In late February, Bangalore-based ed-tech firm Carveniche Technologies Pvt Ltd secured angel funding from Calcutta Angels, Lead Angels and a bunch of wealthy individuals.
This article was originally published in Techcircle.in