India: Unacademy in talks to raise $100m from General Atlantic, GGV

Photo: Reuters

Education tech startup Unacademy is in talks to raise $100 million in a Series E round at a valuation of $400 million, said three people aware of the matter, requesting anonymity.

New investors expected to participate in the round include New York-based private equity firm General Atlantic (GA) and GGV Capital, a global venture capital firm with more than $6 billion in assets under management.

The four-year-old startup allows educators to create videos on its website and app for users for courses from school level learning to college entrance exams across streams, besides for more advanced courses such as civil service exams and MBA entrance tests.

While its content was mostly free so far, earlier this year, it started Unacademy Plus, a subscription-based service.

“Investors are bullish about the company given the subscription’s prospects, which has already become the main revenue driver for the startup, unlike other companies, which depend on advertisement revenue to subsidise their core offering,” said the first of the three people cited above.

Unacademy posted ₹11.6 crore in revenue and a loss of ₹90 crore in FY19, according to a report from Entrackr, an online news portal.

However, its entire revenue came from subscriptions, and rose 6.6 times compared to the previous year, while losses grew nearly four times.

It had last raised $50 million in a Series D round in June 2019 led by hedge fund Steadview Capital, along with existing investors Sequoia Capital, Nexus Venture Partners, SAIF Partners and Blume Ventures.

Unacademy, run by Sorting Hat Technologies Pvt. Ltd, was founded by Gaurav Munjal, Roman Saini and Hemesh Singh. It began as a YouTube channel before distributing content on its own platform.

While the funding round is expected to close within the next six weeks, more investors, such as Singapore’s sovereign wealth fund GIC, could participate, said the second person.

While GGV Capital declined to comment, GA, GIC and Unacademy’s Munjal did not respond to emails seeking comment.

GA is also an investor in online learning firm Byju’s (Think and Learn Pvt. Ltd), one of India’s most valued startups at $5.7 billion. It has also been an active investor in the education space globally, with investments in European online higher learning platform OpenClassrooms, and SAS, a Brazilian firm which provides educational content to schools.

GGV Capital, which has backed some of the world’s biggest tech companies such as Alibaba, and ByteDance, has recently started investing in India, making its first bet in business-to-business (B2B) online retailer Udaan in September this year, valuing it at $2.8 billion.

Unacademy is among a series of mature education sector startups that have emerged in the last few years, backed by some of the country’s most prominent consumer internet investors. Other startups include Toppr, Vedantu, Eruditus, UpGrad and Whitehat Jr. Most of these firms and their investors hold the thesis that education in India has not evolved over the years, and that it has not penetrated significantly beyond the metros in a meaningful way.

“Education is also a space where parents are also more than willing to pay, making it one of the most monetizable spaces for innovative startups,” said an investor in the space, and the third person cited above.

This article was first published on livemint.com

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.