In the past year, India’s startup ecosystem has witnessed the downfall of two of its most highly-valued unicorns due to the substantial debt they raised. During the Covid years, Byju's, formerly India's most-valued startup with a peak valuation of $22 billion, and Pharmeasy, which was poised for a stock exchange debut, raised $1.2 billion and $285 million in debt, respectively, for their acquisitions and operational needs.

Both companies, however, went on to violate certain loan covenants, leading to the haunting repercussions of their debt. Pharmeasy had to secure new funds with a staggering 90% drop in its valuation, while Byju's had to contemplate selling key assets to settle its outstanding loans.

These cautionary tales, though, appear not to have weakened Mumbai-based Eruditus’ appetite for debt. In September, The CapTable has learned, the edtech startup secured an additional $30 million in debt, with Mars Growth Capital providing the top-up cheque.