Unacademy will receive $150 million in a fresh funding round led by Japan’s SoftBank Vision Fund, the Bengaluru-based education technology company said on Wednesday.
The capital infusion, which has yet to hit the bank, will push the firm’s valuation to $1.45 billion, the company said, second only to industry leader Byju’s and catapulting it into the unicorn club – companies valued at $1 billion or more — among ed-tech startups in India.
ET reported on August 15 that Unacademy was in talks to raise $150 million from investors led by SoftBank.
Existing investors General Atlantic, Sequoia Capital, Nexus Venture Partners, Facebook, and Blume Ventures also participated in the funding round.
Unacademy last picked up $110 million from Facebook and private equity firm General Atlantic in February, at a valuation of $510 million, according to the company.
The company, which claims to have about 350,000 active paid subscribers, will primarily use the proceeds to launch its much anticipated K-12 product in less than four weeks, which will also see it clashing head-to-head with Byju’s, India’s largest ed-tech company. Unacademy also plans to launch more niche offerings, such as chess subscriptions and computer programming.
According to Gaurav Munjal, co-founder and chief executive of Unacademy, some early angel investors have undertaken partial exits post the closure of the round, but he declined to provide names.
Sumer Juneja, Partner at SoftBank Investment Advisers, said, “We have been closely tracking Unacademy for the last 18 months and have been impressed by their growth, quality of product and consumer engagement. They are truly democratizing education in India and we look forward to helping them scale even further.”
According to Munjal, the money from SoftBank is expected to be wired in the next couple of weeks. The company in calendar year 2020 has already raised an estimated $260 million, and is targeting being cash flow positive over the next 18 months.
This is SoftBank Vision Fund’s first investment in an Indian firm since December when it backed eyewear retailer Lenskart. The investment will come from SoftBank Vision Fund-2 . The famed technology investor has over the past year slowed down on new bets globally, cutting fewer cheques following the IPO debacle at portfolio firm WeWork.
SoftBank Vision Fund’s other big Indian portfolio companies, such as budget hotels chain Oyo and digital payments platform Paytm, have also been under the scanner due to mounting losses.
The funding comes amid increased investor interest in the online education sector that has seen stupendous growth amid the Covid-19 pandemic.
For Unacademy’s first investor Blume, this is the fund’s first homegrown unicorn startup.
“We have not missed a round at Unacademy.. ,” said said Karthik Reddy, founder of Blume Ventures, am early backer of the company. The rule of thumb is simple. Do we think the founder will build beyond 5x from here? If so, let’s try and play. And, so we did..” he added.
Unacademy counts a host of angel investors like redBus founder Phanindra Sama, Flipkart CEO Kalyan Krishnamurthy, TaxiforSure co-founder Aprameya Radhakrishna, Udaan co-founder Sujeet Kumar, and Paytm founder Vijay Shekhar Sharma, among others.
Byju’s valuation has gone up to $10.5 billion, from $8 billion in January, while live online learning platform Vedantu also saw its valuation soar to $600 million recently.
Ed-tech firm Eruditus raised $113 million last week from investors led by Facebook founder and CEO Mark Zuckerberg and Priscilla Chan’s philanthropic organisation, the Chan Zuckerberg Initiative, taking its valuation to $800 million.
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