Source: Scaler
Scaler, an upskilling platform that helps college students and professionals upgrade their tech skills, is nearing a new round of funding that will raise around $40 million. This will be the company’s first fundraising round in more than three years, the last being an investment in February 2022.
Sources familiar with the company’s plans say “Lighthouse is likely to lead a new funding round in Scaler, with some existing investors also participating. The deal is in its final stages and, barring any last-minute changes, is expected to close in a few weeks,”
Valuation Drops by Nearly 50%
Scaler’s valuation was pegged at $710 million after its Series B round in 2022. The next round is anticipated to be worth $350 to $370 million, representing a significant decrease in value as Scaler will have undergone a “down round,” the open round in which a startup raises money at lower valuation than before.
Scaler has raised over $75 million from some of the world’s most well-known investors including Lightrock India, Peak XV Partners, and Tiger Global. Scaler did not issue a comment in response to questions. Peak XV declined requests for a comment, and Lighthouse had not responded at the time of writing.
Training India’s Tech Talent
Launched in 2019, Scaler is a six-month, intense computer science program. It’s taught via live online classes with tech industry leaders. The goal is to help college students and working professionals accelerate their job-ready skills, and find better career choices in the tech industry.
Scaler counts thousands of students yearly and competes with tech education platforms like upGrad, Simplilearn, and Newton School.
Financial Performance Indicates Growth
Despite the loss in valuation, Scaler’s business has shown strong financial performance. The company generated ₹384.5 crores in revenues from operations for the financial year 2023–24 (FY24), up from ₹316.7 crores from the previous year. The company also reduced its overall losses by 58% to ₹139 crores, which is more attributable to scaling back costs than revenues growth.
With such a strong financial performance Scaler began FY25 by laying off approximately 150 employees. The company said the layoffs were made to ensure long-term growth and sustainability.
Funding Slowdown in the Startup Ecosystem
Scaler is not alone in finding it tough to raise capital. Many growth and late-stage startups are being forced to raise their next round of capital at flat or worse valuations. Spinny, Euler Motors, Udaan, and Pratilipi are notable examples of companies experiencing the same challenges. Even best in class companies like CRED are seeing their valuations come down – while it is raising $75 million, the company’s current valuation is $3.5 billion, down from its previous valuation of $6.4 billion.
