Indonesian education technology (edtech) startup Ruangguru is in advanced discussions to secure Series B funding, according to two people aware of the development.
The company is likely to raise over $6 million through the funding round to fuel its expansion plans, according to people in the know. The deal is expected to be sealed soon.
Ruangguru confirmed to DEALSTREETASIA that it was indeed in discussions to raise funding. In an emailed response, it said: “It is true that we are raising Series B but the amount stated is pure speculation. At this moment, unfortunately, we can not mention any investor that we have been talking to and the stage of the discussion. We cannot provide comments for the other questions.”
Launched in 2014, the startup operates Ruangguru.com, an online marketplace for private tutoring with over 27,000 teachers covering more than 100 subjects. It also offers a mobile app and a learning management system.
Ruangguru had raised a seven-digit Series A in December 2015 led by Venturra Capital, a VC firm focused on early-stage tech companies in Southeast Asia. East Ventures had led the startup’s seed round in 2014. Industry experts predict that Ruangguru may rope in an international strategic investor for its Series B round, given the lack of local series B investors.
With significant quality gaps in education systems across Asia, startups in the region have an opportunity to truly disrupt the space using technology. Finding a business model that works could be challenging though.
“Education has ample opportunity, even though business models are unclear. For instance, even if you do improve quality of teachers, how do you monetise it? While a lot of people are thinking about it, there is a dearth of good business models in Southeast Asia, thus making it an extremely attractive sector,” says Dondi Hananto, Principal at Patamar Capital, earlier known as Unitas Impact Fund.
Among other notable investments in the education space in Asia, Pearson had injected $2.2 million in Indonesian online education service HarukaEdu through its Pearson Affordable Learning Fund in late 2016. Similarly, Gray Matters Capital recently invested an undisclosed amount in India-based Liqvid English Edge.
Other education-focused investors include India-based impact investor Aavishkaar, which has funded companies such as Butterfly Fields and Little Laureates, and 500 Startups, whose portfolio companies include Kidblog, Chalkable, MindSnacks, Magoosh, Motion Math, Storypanda, and Timbuktu.