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Indian food delivery giant Zomato secures $660 million

Zomato has raised $660 million in a financing round that it kicked off last year as the Indian food delivery startup prepares to go public next year.

The Indian startup said Tiger Global, Kora, Luxor, Fidelity (FMR), D1 Capital, Baillie Gifford, Mirae and Steadview participated in the round — a Series J — which gives Zomato a post-money valuation of $3.9 billion. Zomato had previously disclosed a fundraise of about $212 million as part of a Series J round from Ant Financial, Tiger Global, Baillie Gifford and Temasek.

Deepinder Goyal, the co-founder and chief executive of Zomato, said the 12-year-old startup is also in the process of closing a $140 million secondary transaction. “As part of this transaction, we have already provided liquidity worth $30m to our ex-employees,” he tweeted.

The startup originally anticipated to close a round of about $600 million by January this year, but several obstacles, including the current pandemic, delayed the fundraise effort. Additionally, Ant Financial, which had originally committed to invest $150 million in this round, only delivered a third of it, Zomato’s investor Info Edge disclosed earlier this year.

The Gurgaon-headquartered startup, which acquired the Indian food delivery business of Uber early this year, competes with Prosus Ventures-backed Swiggy in India. A third player, Amazon, has also emerged in the market, though it currently offers its food delivery service in only parts of Bangalore.

At stake is India’s food delivery market, which analysts at Bernstein expect to balloon to be worth $12 billion by 2022, they wrote in a report to clients — accessed by TechCrunch. With about 50% of the market share, Zomato is the current leader among the three, Bernstein analysts wrote.

Zomato eliminated hundreds of jobs this year to improve its finances and navigate the coronavirus pandemic, which significantly hurt the food delivery business in India in the early months. Goyal said the food delivery market is “rapidly coming out of COVID-19 shadows. December 2020 is expected to be the highest ever GMV month in our history. We are now clocking ~25% higher GMV than our previous peaks in February 2020.” He added, “I am supremely excited about what lies ahead and the impact that we will create for our customers, delivery partners, and restaurant partners.”

In September, Goyal told employees that Zomato was working for its IPO for “sometime in the first half of next year” and was raising money to build a war-chest for “future M&A, and fighting off any mischief or price wars from our competition in various areas of our business.”

Making money with food delivery has been especially challenging in India. Unlike Western markets such as the U.S., where the value of each delivery item is about $33, in India, a similar item carries the price tag of $4, according to estimates by Bangalore-based research firm RedSeer.

“The problem is that there are very few people in India who can afford to place an order from a food delivery firm each day,” said Anand Lunia, a venture capitalist at India Quotient, in an interview with TechCrunch earlier this year.

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BigID keeps rolling with $70M Series D on $1B valuation

BigID has been on the investment fast track, raising $94 million over three rounds that started in January 2018. Today, that investment train kept rolling as the company announced a $70 million Series D on a valuation of $1 billion.

Salesforce Ventures and Tiger Global co-led the round with participation Glynn Capital and existing investors Bessemer Venture Partners, Scale Venture Partners and Boldstart Ventures. The company has raised almost $165 million in just over two years.

BigID is attracting this kind of investment by building a security and privacy platform. When I first spoke to CEO and co-founder Dimitri Sirota in 2018, he was developing a data discovery product aimed at helping companies coping with GDPR find the most sensitive data, but since then the startup has greatly expanded the vision and the mission.

“We started shifting I think when we spoke back in September from being this kind of best of breed data discovery privacy to being a platform anchored in data intelligence through our kind of unique approach to discovery and insight,” he said.

That includes the ability for BigID and third parties to build applications on top of the platform they have built, something that might have attracted investor Salesforce Ventures. Salesforce was the first cloud company to offer the ability for third parties to build applications on its platform and sell them in a marketplace. Sirota says that so far their marketplace includes just apps built by BigID, but the plan is to expand it to third-party developers in 2021.

While he wasn’t ready to talk about specific revenue growth, he said he expects a material uplift in revenue for this year, and he believes that his investors are looking at the vast market potential here.

He has 235 employees today with plans to boost it to 300 next year. While he stopped hiring for a time in Q2 this year as the pandemic took hold, he says that he never had to resort to layoffs. As he continues hiring in 2021, he is looking at diversity at all levels from the makeup of his board to the executive level to the general staff.

He says that the ability to use the early investments to expand internationally has given them the opportunity to build a more diverse workforce. “We have staff around the world and we did very early […] so we do have diversity within our broader company. But clearly not enough when it came to the board of directors and the executives. So we realized that, and we are trying to change that,” he said.

As for this round, Sirota says like his previous rounds in this cycle he wasn’t necessarily looking for additional money, but with the pandemic economy still precarious, he took it to keep building out the BigID platform. “We actually have not purposely gone out to raise money since our seed. Every round we’ve done has been preemptive. So it’s been fairly easy,” he told me. In fact, he reports that he now has five years of runway and a much more fully developed platform. He is aiming to accelerate sales and marketing in 2021.

The company’s previous rounds included a $14 million Series A in January 2018, a $30 million B in June that year and a $50 million C in September 2019.

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Scale AI hits $3.5B valuation as it turns the AI boom into a venture bonanza

Scale AI, the four-year-old data labeling startup, has discovered that selling the picks and shovels needed to develop and apply artificial intelligence is big business.

The company, which created a visual data labeling platform that uses software and people to label image, text, voice and video data for companies building machine learning algorithms, has raised another $155 million. The funding round, led by Tiger Global, pushes Scale’s post-money valuation to more than $3.5 billion. 

Importantly, Scale is now a “break even” business and is set up to continue to add employees and expand into new markets in a sustainable way, Scale’s CEO and co-founder Alexandr Wang told TechCrunch. Scale will use the funds to grow its workforce from 200 people to about 350 by the end of next year. (Those employee numbers don’t include the tens of thousands of contractors it uses to label data.) It’s also focused on new markets and adding products and platform capabilities.

Scale got its start by supplying autonomous vehicle companies with the labeled data needed to train machine learning models to develop and deploy robotaxis, self-driving trucks and automated bots used in warehouses and on-demand delivery. Legacy automakers such as General Motors and Toyota, chipmaker Nvidia and a slew of AV startups, including Nuro and Zoox, have used its platform.

More recently, Scale’s customers have spilled over into government, e-commerce, enterprise automation and robotics. Airbnb, OpenAI, DoorDash and Pinterest are some of its customers. That pace of expansion has accelerated in 2020, according to Wang. 

“One thing that we saw, especially in the course of the past year, was that AI is going to be used for so many different things,” Wang said. “It’s like we’re just sort of really at the beginning of this and we want to be prepared for that as it happens.”

Part of that preparation means evolving beyond being just a data labeler. Earlier this year, the company quietly launched Nucleus, an AI development platform that Wang describes as the “Google Photos for machine learning data sets.” Nucleus provides customers a way to organize, curate and manage massive data sets, giving companies a means to test their models and measure performance among other tasks.

“Nucleus is the first product of our future, I would say,” Wang said. “We definitely see that the next biggest bottleneck for a lot of our customers is, ‘how are they going to have the suite of tools and suite of infrastructure that exists today for building out software?’ None of that exists for machine learning.”

The plan is to continue to build out Nucleus into a fully integrated platform that helps more companies be able to do AI, Wang said.

Scale made its first acquisition to support Nucleus with the purchase of a four-person startup called Helia. The team, which has expertise in real-time video and neural network training, will support Nucleus.

“The one thing that we were noticing across our whole customer base was that more and more customers, even beyond just the self-drive folks were wanting to do AI on real-time video. And so it was becoming this expertise that we knew just wasn’t going to go away.”

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SentinelOne, an AI-based endpoint security firm, confirms $267M raise on a $3.1B valuation

This year, more than ever before because of the COVID-19 pandemic, huge droves of workers and consumers have been turning to the internet to communicate, get things done and entertain themselves. That has created a huge bonanza for cybercriminals, but also companies that are building tools to combat them.

In the latest development, an Israel-hatched, Mountain View-based enterprise startup called SentinelOne — which has built a machine learning-based solution that it sells under the brand Singularity that works across the entire edge of the network to monitor and secure laptops, phones, containerised applications and the many other devices and services connected to a network — has closed $267 million in funding to continue expanding its business to meet demand, which has seen business boom this year. Its valuation is now over $3 billion.

Given the large sums the company has now raised — $430 million to date — the funding will likely be used for acquisitions (cyber is a very crowded market and will likely see some strong consolidation in the coming years), as well as more in-house development and sales and marketing. Earlier this year, CEO and founder Tomer Weingarten told me that an IPO “would be the next logical step” for the company. “But we’re not in any rush,” he said at the time. “We have one to two years of growth left as a private company.”

SentinelOne contacted TechCrunch with the above details but said that an official press release was due only to be released at 3 p.m. U.K. time. We’ll update with more details if they’re available when they are published. In the meantime, other outlets such as Calcalist in Israel (in Hebrew) have also published these details. And it should be noted that the round was rumored for almost a month ahead of this, although the sums raised were off by quite a bit: the reports had said $150-200 million.

(Side note: Why the pointless games with timings and exclusives? Who knows — I certainly don’t. )

This round included Tiger Global, Sequoia, Insight Partners, Third Point Ventures and Qualcomm Ventures . It looks like Sequoia — which is currently building up a new European operation to look more closely at opportunities on this side of the globe — is the only new name in that list. The others have all backed SentinelOne in previous rounds.

It was only in February of this year that SentinelOne had raised $200 million at a $1.1 billion valuation.

The rapid fundraising, from a top-shelf list of firms, is a notable aspect of this story.

In the world of startups, we are firmly living in a time when investors are looking for strong opportunities to back companies that are shining in a market that is particularly challenging. COVID-19 has all but decimated the travel industry and live in-person event industry, among others.

But services that are helping people continue to live their lives, and those that are helping find a cure or at least solutions to minimise the impact, are very much in demand.

The cybersecurity market — in particular companies that are providing solutions that can immediately prove to be effective in what is an increasingly sophisticated threat landscape — is incredibly active right now, even more than it already was.

“Around 450 cybersecurity companies are operating in Israel, constituting 5% of the global cybersecurity market, in some cyber segments the two world leaders are by Israeli founders like CheckPoint and Palo Alto,” noted Avihai Michaeli, an advisor who scouts startups for corporate VCs.

Within that, endpoint security, the area where SentinelOne concentrates its efforts, is particularly strong. Last year, endpoint security solutions was estimated to be around an $8 billion market, and analysts project that it could be worth as much as $18.4 billion by 2024.

While SentinelOne has a lot of competitors — they include Microsoft, CrowdStrike, Kaspersky, McAfee and Symantec — it is also a strong player in the market. Relying on the advances of AI and with roots in the Israeli cyberintelligence community, its platform is built around the idea of working automatically not just to detect endpoints and their vulnerabilities, but to apply behavioral models, and various modes of protection, detection and response in one go.

“We are seeing more automated and real-time attacks that themselves are using more machine learning,” Weingarten said to me this year. “That translates to the fact that you need defence that moves in real time as with as much automation as possible.”

As of February, it had 3,500 customers, including three of the biggest companies in the world, and “hundreds” from the global 2,000 enterprises, with 113% year-on-year new bookings growth, revenue growth of 104% year-on-year and 150% growth year-on-year in transactions over $2 million. Those numbers will have likely grown significantly since then. (We’ll update as and when we learn more.)

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Lee Fixel is already raising a massive second fund

On Friday, former Tiger Global Management investor Lee Fixel registered plans for the second fund of his new investment firm, Addition, just four months after closing the first. According to a report on Friday by the Financial Times, the outfit spent last week finalizing the fundraising for the $1.4 billion fund, which Addition reportedly doesn’t plan to begin investing until next year.

But a source close to the firm now says the capital has not been raised. That’s perhaps good news for investors who were shut out of Addition’s $1.3 billion debut fund and who might be hoping to write a check this time around.

The mere fact that Fixel is back in the market already has tongues wagging about the dealmaker, one whose reluctance to talk on the record with media outlets seems only to add to his mystique. Forbes published a lengthy piece about Fixel this summer, in which Fixel seems to have provided just one public statement, confirming the close of Addition’s first fund and adding little else. “We are excited to partner with visionary entrepreneurs, and with our 15-year fund duration, we have the patience to support our portfolio companies on their journey to build impactful and enduring businesses,” it read.

According to Forbes, that first fund — which Fixel is actively putting to work right now — intends to invest one-third of its capital in early-stage startups and two-thirds in growth-stage opportunities.

Whether that includes some of the special purpose acquisition vehicles, or SPACs, that are coming together right and left, isn’t yet known, though one imagines these might appeal to Fixel, who has long seemed to be at the forefront of new trends impacting growth-stage companies in particular. (A growing number of SPACs is right now looking to transform into public companies some of the many hundreds of richly valued private companies in the world.)

Clearer is that Addition is wasting little time in writing some big checks. Among its announced deals is Inshorts, a seven-year-old, New Delhi, India-based popular news aggregation app that last week unveiled $35 million new funding led by Fixel.

The deal represents Addition’s first India-based bet, even while Fixel knows both the country and the startup well. He previously invested in Inshorts on behalf of Tiger; he’s also credited for snatching up a big stake in Flipkart on behalf of Tiger, a move that reportedly produced $3.5 billion in profits when Flipkart sold to Walmart.

Addition also led a $200 million round last month in Snyk, a five-year-old, London-based startup that helps companies securely use open-source code. The round valued the company at $2.6 billion — more than twice the valuation it was assigned when it raised its previous round 10 months ago.

And in August, Addition led a $110 million Series D round for Lyra Health, a five-year-old, Burlingame, California-based provider of mental health care benefits for employers that was founded by former Facebook CFO David Ebersman.

A smaller check went to Temporal, a year-old, Seattle-based startup that is building an open-source, stateful microservices orchestration platform. Last week, the company announced $18.75 million in Series A funding led by Sequoia Capital, but Addition also joined the round, having been an earlier investor in the company.

According to PitchBook data, Addition has made at least 17 investments altogether.

Fixel — whose bets while at Tiger include Peloton and Spotify — isn’t running Addition single-handedly, though according to Forbes, he is the single “key man” around which the firm revolves, as well as the biggest investor in Addition’s first fund.

He has also brought aboard at least three investment principals from Wall Street and a head of data science who worked formerly for Uber (per Forbes). Ward Breeze, a longtime attorney who worked formerly in the emerging companies practice of Gunderson Dettmer, is also working with Fixel at Addition.

(Correction: An earlier version of this story reported that Fixel’s newest fund was already raised, per the FT.)

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Nym Health raises $16.5 million for its auditable machine learning tools for automating hospital billing

A little less than two years after raising its seed round, the Israeli-based Nym Health has added another $16.5 million to its cash haul so it can roll out its technology developing auditable machine learning tools for automating hospital billing.

The new financing came from investors, including GV (the investment arm of Google previously known as Google Ventures), and will be used by the company to expand its technology development and sales and marketing efforts across the U.S.

Billing has been a huge problem for healthcare systems in the U.S., thanks to complicated coding that needs to be entered to ensure insurance providers pay for the services medical professionals give to patients.

Nym claims to have solved the problem by developing technologies that can convert medical charts and electronic medical records from physician’s consultations into proper billing codes automatically. The company uses natural language processing and taxonomies that were specifically developed to understand clinical language to determine the optimal charge for each procedure, examination and diagnostic conducted for a patient, according to Nym.

The company was founded in 2018 by two former members of Israel’s 8200 cybersecurity unit of the army. Adam Rimon and Amihai Neiderman both wanted to work on something together and Neiderman was set on doing something in the medical space involving natural language processing. Rimon had just finished a doctorate in computational linguistics, so the move into charting and medical coding seemed natural.

“Because of our approach we can generate full audit trails,” said Neiderman. “We can explain how we understood everything in patient charts.”

Having automated processes that are also auditable is important for healthcare providers in case they need to provide justification to insurance companies for the services they performed.

Nym’s software can’t address fraud if physicians are padding their bills with services they didn’t offer, but it can provide an audit and justification for the services that a hospital coded for — and potentially wring more money for hospitals that lose out thanks to improperly coded bills. “On the medical decision-making we never intervene. We assume that the physician is trying to do their best and they’re sticking to the protocol,” said Neiderman. 

Interest in developing better billing systems for healthcare is high among venture investors, considering that coding related denials of payment can cost hospitals $15 billion, according to Nym. It’s a service that brought attention not just from GV, but Bessemer Venture Partners, Dynamic Loop Capital, Lightspeed, Tiger Global, and angel investors including Zach Weinberg and Nat Turner from Flatiron Health.

“Inaccurate coding is bad for everybody,” says Ben Robbins, a venture partner at GV.

Nym charges between $1 and $4 per chart it analyzes, and is already working with around 40 medical providers in the U.S., according to the company.

 

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Postmates cuts losses in Q2 as it heads towards tie-up with Uber

Popular food delivery service Postmates is in the process of merging with Uber in a blockbuster $2.65 billion deal that would see it join forces with its food delivery competitor, Uber Eats. The deal remains under antitrust scrutiny, and has not yet been approved for closing. The deal is expected to close in the first half of 2021.

However, a new SEC filing posted after hours this Friday gives us a glimpse into how Postmates is faring in the new world of global pandemics and sit-in dining closures across the United States.

Postmates posted a loss of just $32.2 million in Q2, compared to a loss of $73 million in Q1, nearly cutting its cash burning in half. That compares to Uber Eats’ results, which showed a loss of $286 million in the first quarter of 2020 and a loss of $232 million in the second quarter — an improvement of roughly 20%, according to Uber’s most recent financial reports.

Altogether, Postmates lost $105.2 million in the first half of 2020, compared to a loss of $239 million in the same period of 2019.

Uber through its filing today also disclosed the cap table for Postmates in full detail for the first time. On a fully diluted basis, the largest shareholder in Postmates is Tiger Global, which owns 27.2% of the company. Following up is Founders Fund with 11.4%, Spark Capital with 6.9% and GPI Capital with 5.3%. At Uber’s $2.65 billion all-stock deal, that nets Tiger Global roughly $720 million and Founders Fund roughly $302 million, not including some stock preferences and dividends that certain owners of the company hold.

While Postmates and Uber continue to go through the antitrust review process at the federal level, the companies also face legal pressure in their own backyards. Uber noted in its filing today that it and Postmates face headwinds due to California’s AB 5 bill, which is designed to give additional employment protections to freelance workers. However, the company notes that such litigation “may not, in and of itself, give rise to a right of either party to terminate the transaction.”

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India’s Zomato raises $100M from Tiger Global, says it is planning to file for IPO next year

Indian food delivery startup Zomato has raised $100 million from Tiger Global and is preparing for the next phase of its journey: an IPO.

Tiger Global financed the capital through its investment vehicle Internet Fund VI, according to a regulatory filing. Info Edge, a major investor in Zomato, confirmed the development Thursday evening, adding that the new round valued Zomato at $3.3 billion post-money.

In an email to employees earlier today, Zomato co-founder and chief executive Deepinder Goyal said the startup had about $250 million cash in the bank and several more “big name” investors would be joining the current round to increase its cash reserve to about $600 million “very soon.”

“Important note — we have no immediate plans on how to spend this money. We are treating this cash as a ‘war-chest’ for future M&A, and fighting off any mischief or price wars from our competition in various areas of our business,” he added in the letter, reviewed by TechCrunch.

Zomato, which acquired the Indian food delivery business of Uber early this year, competes with Prosus Ventures-backed Swiggy in India. A third player, Amazon, has also emerged in the market, though it is currently servicing food delivery in only select suburbs of Bangalore.

Goyal told employees that the 12-year-old startup is also working for its IPO for “sometime in the first half of next year.” (It’s unclear how Zomato plans to achieve this target, but it is likely looking at listing in the U.S. or some other market. Current Indian law requires a startup to be profitable for at least three years before they could publicly list in India — though there has been some proposal to relax this requirement.)

The new pledge from Zomato is the result of a major economic improvement in its business in recent quarters. Until mid-last year, Zomato was losing more than $50 million a month to win and sustain customers by offering heavy discounts.

The Gurgaon-headquartered firm, which like Swiggy eliminated hundreds of jobs in recent months as coronavirus ruined the appetite of Indians ordering food online, said in July that its losses for the month would be less than $1 million.

The startup also faced obstacles in raising new capital. It kickstarted its financing round a year ago, but had secured only $50 million as of a month ago. The startup had originally anticipated closing this round, at about $600 million, in January this year.

In an emailed response to TechCrunch queries in April, Goyal had attributed the delays to the spread of coronavirus and said he expected to close the round by mid-May. He wrote to employees today that Tiger Global, Temasek, Baillie Gifford and Ant Financial had already participated in the current round.

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SirionLabs raises $44M to scale its contract management software

SirionLabs, a startup that provides contract management software to enterprises, has raised $44 million in a new financing round as it looks to expand and handle surge in demand from clients.

Tiger Global and Avatar Growth Capital led the Seattle-headquartered startup’s Series C round. The eight-year-old startup, which was founded in India, has raised $66 million to date. The new round values the startup at about $250 million. Indian VC fund Avatar has long invested in SaaS startups in India, an area that Tiger Global has also made serious bets on in recent quarters.

Enterprises broadly handle two kinds of contracts, one when they are buying things from a supplier for which they use a procurement contract, and the other when they are selling things to customers, when a sales contract comes into play.

A significant number of companies today handle these contracts manually with different teams within an organization often dealing with the same entity, which leads to discrepancies in their promises. Teams work in silos and often don’t know the terms others in the organization have already agreed upon.

That’s where SirionLabs comes into the picture. “We use artificial intelligence and natural language processing to connect the dots between contracts and what happens after the contract has been signed,” explained Ajay Agrawal, cofounder, chairman and chief executive of the startup, in an interview with TechCrunch.

“For us, it’s not just creating a contract, but also realizing the promises that have been made in those contracts,” he said. SirionLabs also audits the invoice of suppliers, which has enabled its customers to save a significant amount of money.

SirionLabs today hosts contracts in over 40 languages for more than 200 of the world’s largest companies including Credit Suisse, Vodafone, EY, Unilever, Abbvie, BP, and Fujitsu.

Agrawal said the startup has seen a 4X growth in the number of customers it has signed up in the last 18 months. Part of the new capital would go into handling their demand. He said the coronavirus crises has resulted in many companies becoming more cautious about what they promise in their contracts.

The startup, which just opened a technology center in Seattle, also plans to open an AI laboratory in the Washington state to fuel technology innovation and grow sales.

It has also hired several industry veterans including the appointment of Amol Joshi as chief revenue officer, Anu Engineer as chief technology officer, Mahesh Unnikrishnan as chief product officer, and Vijay Khera, who will serve as chief customer officer.

Vishal Bakshi, founder and managing partner at Avatar Growth Capital, said he expects SirionLabs, which competes with Apttus and Icertis among other firms, to “capture massive network effects as the platform continues to scale.”

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Indian education startup Byju’s is fundraising at a $10B valuation

Byju’s, an education learning startup in India that has seen a surge in its popularity in recent weeks amid the coronavirus outbreak, is in talks to raise as much as $400 million in fresh capital at a $10 billion valuation, said three people familiar with the matter.

The additional capital would be part of the Bangalore-based startup’s ongoing financing round that has already seen Tiger Global and General Atlantic invest between $300 million to $350 million into the nine-year-old startup.

That investment by the two firms, though, was at an $8 billion valuation, said people familiar with the matter. Byju’s was valued at $5.75 billion in July last year, when it raised $150 million from Qatar Investment Authority and Owl Ventures.

If the deal goes through at this new term, Byju’s would become the second most valuable startup in India, joining budget lodging startup Oyo, which is also valued at $10 billion, and following financial services firm Paytm that raised $1 billion at $16 billion valuation late last year.

The talks haven’t finalized yet and terms could change, said one of the aforementioned people. This person, along with the other two, requested anonymity as the matter is private.

Spokespeople of Byju’s and Prosus Ventures, the largest investor in the startup, declined to comment. A spokesperson for Tiger Global did not respond to a request for comment.

Byju’s has seen a sharp surge in both its free users and paying customers in recent weeks as it looks to court students who are stuck at home because of the nationwide lockdown New Delhi ordered in late March.

The startup told TechCrunch last month that traffic on its app and website was up 150% in March and it added six million students to the platform during the month.

Other edtech startups, including Unacademy, which was recently backed by Facebook, and early-stage startups such as Sequoia Capital India-backed Classplus, and Chennai-based SKILL-LYNC, have also seen growth in recent weeks, they told TechCrunch last month.

Through its app, tutors on Byju’s help all school-going children understand complex subjects using real-life objects such as pizza and cake. The app also prepares students who are pursuing undergraduate and graduate-level courses.

Over the years, Byju’s has invested in tweaking the English accents in its app and adapted to different education systems. It had amassed more than 35 million registered users, about 2.4 million of which are paid customers as of late last year.

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