Edtech startup moves toward SME IPO amid strong growth

Edtech Startup Klassroom Moves Toward SME IPO Amid Strong Growth

Klassroom, a prominent player in the Indian edtech sector, has taken a significant step towards public listing by filing its Draft Red Herring Prospectus (DRHP) with the Securities and Exchange Board of India (SEBI) for a BSE SME IPO. This move underscores the company's confidence in its growth trajectory and signals a broader trend of Indian edtech firms preparing for public markets.

The IPO plan includes the issuance of 19,89,000 fresh shares alongside an offer-for-sale of 4,66,000 shares, providing existing shareholders an opportunity to divest part of their holdings. Such a combination of fresh issuance and offer-for-sale is indicative of the company's strategy to raise capital for expansion while allowing early investors to realize gains.

A key highlight of Klassroom’s recent performance is its remarkable revenue growth, with the company reporting an approximate 120% surge in revenue for FY25. This impressive growth rate reflects strong market demand and effective scaling, positioning Klassroom as a promising candidate for public investment.

Significance of the development:

• The filing emphasizes the growing interest of Indian edtech startups in IPOs, particularly those demonstrating robust revenue growth.
• It highlights how scaling revenue before listing is becoming a common strategy among Indian firms seeking to attract investor confidence.
• The move aligns with the increasing investor appetite for edtech companies in India, especially as the sector continues to expand rapidly post-pandemic.

Klassroom’s upcoming IPO is set to be a noteworthy event, illustrating both the sector’s maturation and the confidence of startups in their ability to reach public markets. As Indian edtech firms like Klassroom scale their operations and demonstrate strong financial performance, they are paving the way for a vibrant, investor-friendly ecosystem in the education technology space.