South Korea’s Mirae Asset also joined the round, and existing investors such as SoftBank Vision Fund, General Atlantic and Tiger Global participated with large cheques, signalling strong investor interest in a sector that has gained tremendously from rising digital adoption during the pandemic.
While the transaction will largely involve a primary infusion of funds, the Bengaluru-based startup is facilitating a secondary share sale of $20 million to provide exits to one of its early investors, as well as a slew of angel investors, a company executive said. With this, Unacademy will have conducted $70-80 million worth of secondary share sales over the past year. The edtech firm, valued at $2 billion less than a year ago, has now seen a 70% bump-up in the current round.
Unacademy has also brought on board Aroa Ventures, Oyo Hotels & Homes founder Ritesh Agarwal’s family office, as well as Deepinder Goyal, cofounder and chief executive officer of Zomato.
In an exclusive interview with ET, Unacademy’s cofounder Gaurav Munjal said that the six-year-old startup, which began life as a YouTube channel for learning, “wants to position itself as a broader technology firm with multiple consumer-facing products, and not be restricted to edtech”.
(Graphic: Rahul Awasthi/ETtech)
Munjal plans to use the funding to build new lines of business in segments such as jobs and hiring, where it will compete with the likes of Naukri.com and Linkedin. It will also launch creator-led short courses and scale existing businesses such as test preparation and K-12 coaching (from Kindergarten to Class XII).
“We want to be a technology company with multiple consumer internet products across sectors. For example, in edtech, we will go deep into two areas—K-12 and careers. Then, there are two markets in upskilling and higher education—degrees and direct jobs—that we also want to push,” he said.
Unacademy runs Careers, which provides upskilling courses and competes with the likes of Upgrad.
On the K-12 side, where Byju’s has had a large presence, Unacademy will focus on affordable live classes. “We want to keep the pricing at $100-150 so it does not become expensive. K-12 is an India product and we are aiming for adoption across Tier II-III towns. This is for after-school, supplemental education,” Munjal said.
The company clocked an 80%-100% growth during April 2020-2021 after the coronavirus lockdown shut schools, coaching classes and all physical educational centres, according to Munjal.
Unacademy is currently clocking a $200-million run rate for its largest business—test preparation—while in K-12, it has an $18-million annualised run rate. Revenue run rate is a projection of upcoming revenue based on previously earned revenue.
The startup estimates it has 600,000 paid active subscribers.
(Graphic: Rahul Awasthi/ETtech)
Focus On Acquisitions
Unacademy has been making a slew of small- to mid-sized acquisitions to boost new segments such as jobs and the creator economy. “For Relevel, under the Jobs vertical, we acquired two companies,
Rheo TV and
TapChief. Both teams have been merged to work on Relevel (where students can take certain tests and get a job in private firms), said Munjal, who expects “more early-stage acquisitions”.
ET reported last week that Unacademy
is in talks to invest in Orchids International chain of schools, which will be the first such move by an edtech firm. The present discussions to invest $25-30 million may even lead to an eventual acquisition, according to the report.
Munjal said these acquisitions and investments are part of the strategy to add scale to each of the verticals and achieve an annualised revenue of $100 million for them individually. Once these attain a sizable scale, Unacademy will explore further diversification.
Revenue Growth & IPO
K-12 is viewed as the second biggest vertical for Unacademy, after test preparation. Graphy, which is a platform for creators to grow their audience and monetise their skills, is currently clocking a monthly gross merchandise value of $150,000-200,000.
The company’s plan for a public listing “now seems like a real possibility (after
Zomato’s listing),” said Munjal. “Our core business is not high-burn. We will become profitable in the next 12 months and while there is no formal timeline yet, the company will seriously consider the option in the next two to three years.”