Edtech startup Scaler is finalizing a $40 million fundraise, marking its first funding round since February 2022. While this brings much-needed capital to the upskilling platform, it also comes with a significant drop in valuation—from $710 million to an expected $350–$370 million.
This move reflects the broader trend of late-stage startups raising capital at flat or reduced valuations amid a tough funding climate.
Details of the Deal
According to sources close to the matter, Lighthouse is likely to lead this round, with participation from existing backers. The deal is in advanced stages and could close in the coming weeks.
Despite repeated requests, Scaler declined to comment, calling it “market speculation.” Investors like Peak XV Partners and Lighthouse also refrained from responding publicly.
Funding Background
Before this round:
- Scaler raised $55 million in Series B in February 2022, led by Lightrock India, Peak XV Partners, and Tiger Global.
- It has cumulatively raised over $75 million so far.
However, the current round signals a down round, with valuation likely to drop to nearly half of its previous peak.
Company Snapshot
Scaler focuses on upskilling college students and tech professionals through an intensive six-month program. Delivered via live online classes, the curriculum is led by industry veterans and subject matter experts from top global tech companies.
The platform competes with peers like:
- Newton School
- Masai School
- Simplilearn
Financial Performance
Despite the valuation cut, Scaler’s operating revenue grew 21% in FY24:
- FY23 revenue: ₹316.7 crore
- FY24 revenue: ₹384.5 crore
The company also cut its net losses by 58%, from ₹330 crore in FY23 to ₹139 crore in FY24. This was driven by expense optimization across departments.
Layoffs and Cost Control
In early FY25, Scaler laid off approximately 150 employees. Management cited the decision as a step toward sustainable long-term growth, aligning with its renewed focus on efficiency amid funding constraints.
Broader Market Context
Scaler isn’t alone in taking a valuation hit. Multiple startups are navigating a challenging capital environment, including:
- Spinny ($131M at flat valuation)
- Euler Motors (flat round)
- Udaan (flat round)
- Pratilipi, CityMall, and Stanza Living (down rounds)
- CRED (raising $75M at $3.5B valuation, down from $6.4B)
Investors are becoming cautious, favoring profitability over aggressive expansion.
What’s Next for Scaler?
Scaler will likely use the new funds to:
- Expand its course offerings and technology stack
- Strengthen placement partnerships with tech companies
- Improve operational efficiency to move toward profitability
Despite the valuation drop, the $40 million infusion will help the company stay competitive in the crowded edtech market.
Final Thoughts
While Scaler is raising $40 million at a reduced valuation, the move may be strategically sound in today’s market conditions. The company’s improved financials and continued demand for upskilling show that its fundamentals remain strong. The funding will help Scaler navigate current headwinds and prepare for a more sustainable future.
