Emeritus Raises $350 Million Debt Financing From CPP Investments

Funds will be utilised to fuel mergers and acquisition as part of a robust global growth strategy.

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Emeritus, on Tuesday announced to have secured $350 million in debt financing from Canada Pension Plan Investment Board through its subsidiary CPPIB Credit Investments Inc. Funds will be utilised to fuel mergers and acquisition as part of a robust global growth strategy.

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"Emeritus will expand our mission of making education accessible around the world by deepening our investment in the education space to reach different segments and audiences. Our acquisition pipeline will enable us to accelerate growth, impact more learners, and improve our profitability," said Ashwin Damera, co-founder and CEO, Emeritus and Eruditus.

India's Edtech industry is predicted to become $30 billion in size by 2030 with the growing demand and strengthened business models. The industry has attracted private equity investments of $4 billion in the last five years, according to a report published by transaction advisory firm RBSA Advisors.

"The investment in Emeritus demonstrates our continued commitment to support industry leaders in India, one of our key markets in Asia Pacific. The investment is also aligned with our strategy of pursuing high quality credit investments across Asia Pacific and delivering attractive risk-adjusted returns for our contributors and beneficiaries," said Raymond Chan, Managing Director, Head of APAC Credit, CPP Investments.

After the completion of this debt financing, Emeritus will have raised more than US$1 billion in debt and equity. CPP Investments also participated in Emeritus' $650 million funding round in August 2021, which advanced Emeritus' valuation to $3.2 billion, quadrupling its Series D valuation from August 2020. Investors in Emeritus also include Accel, Softbank Vision Fund 2, GSV, the Chan Zuckerberg Initiative, Leeds Illuminate and Prosus, as well as Sequoia Capital India and Bertelsmann and Chimera.

Emeritus reached learners in more than 80 countries and offered programs through partnerships with more than 50 of the world's top universities in 2021. Emeritus acquired Silicon Valley-based iD Tech, STEM education, which marked Emeritus' expansion into the K12 space. With a year-on-year growth rate of 120 per cent, Emeritus estimates gross bookings of $500 million for the financial year. As the company continues to grow 2.5 times organically, Emeritus will also accelerate growth through inorganic initiatives. The pipeline of potential acquisitions is expected to contribute up to 30 per cent of Emeritus' top line and earnings before interest, taxes, depreciation, and amortization in the next five years.