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Unacademy eyeing unicorn club as it talks for $100-150 million funding

The financing bid comes less than four months after the firm closed a $110 million round led by social media giant Facebook and blue-chip private equity firm General Atlantic.

Last Updated: Jun 05, 2020, 12.05 PM IST
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Unacademy also counts the likes of Sequoia Capital, Nexus Venture Partners, Blume Ventures, Steadview Capital, and Flipkart CEO Kalyan Krishnamurthy as well as Udaan cofounder SujeKumar among its list of backers.
NEW DELHI/BENGALURU: Unacademy is in talks to raise $100-150 million in fresh funding, at a valuation that could catapult the ed-tech firm into the unicorn club, sources told ET.

The financing bid comes less than four months after the firm closed a $110 million round led by social media giant Facebook and blue-chip private equity firm General Atlantic. Existing investors including General Atlantic and Steadview Capital are likely to double down on their stake, while a host of global strategic and financial investors, including US-based hedge funds and China's Tencent have booked interest in the company at a potential valuation of more than $1billion, two sources aware of the developments told ET.

"At this point, there are multiple funds in the mix. The final contours will be finalised in four to six weeks," said a person in the know.

ET, however, was not able to ascertain all investor names. Gaurav Munjal, co-founder of Unacademy, and Tencent did not respond to emails till press time on Thursday. In March, Munjal said the platform crossed a watch time of 1 billion minutes while educators took 100,000 live classes, of which a fourth was free for the month. The company has also launched subscriptions for Class 9-12, onboarding educators across the country. "The growth in the last few months has been massive, and the belief is that Covid-19 can structurally change consumption of education to online," said an investor directly aware of the matter.

The ed-tech firm also counts the likes of Sequoia Capital, Nexus Venture Partners, Blume Ventures, Steadview Capital, and Flipkart CEO Kalyan Krishnamurthy as well as Udaan cofounder Sujeet Kumar, among its list of backers.

In its last funding round announced in February, Unacademy commanded a post-money valuation of $510 million.

That round was led by Facebook and General Atlantic, both of which later announced large investments in Jio Platforms, the wholly owned subsidiary of the Mukesh Ambani-controlled oil-to-telecoms conglomerate Reliance Industries.

The ongoing set of negotiations, if successful, could potentially double its valuation. Unacademy has emerged as an investor favourite, as its services garner greater demand in the wake of the Covid-19 pandemic.

The latest round, which is anticipated to be mostly primary in nature, could close by end-June or mid-July and is also likely to be followed by secondary transactions.

Existing investors of Unacademy -- which was founded by Munjal, Roman Saini and Hemesh Singh in 2015 -- are also likely to participate, on a pro-rata or super pro-rata basis.

Incidentally, Tencent is an existing investor in Bengaluru-headquartered peer Think and Learn, which owns and operates India’s largest ed-tech platform Byju’s Learning, having invested in the former in 2017 and 2019, respectively.

Separately, Mark Zuckerberg had also invested in Byju’s through his philanthropic and investment arm Chan-Zuckerberg Initiative in 2016, before scoring a partial exit last year.

Unacademy, which focuses on preparing students for competitive exams, said in February that it has over 90,000 active subscribers who log in to be tutored via livestream by 14,000-plus educators on its platform. The company also hosts video tutorials on YouTube, which it says receives over 150 million monthly views, and acts as a funnel in bringing learners onto its platform.

India’s ed-tech sector is one of the few that has been galvanized by the Covid-19 pandemic, which has forced schools, colleges and higher education institutions to down their shutters, and move to the education-focused web and mobile platforms.

Other ed-tech companies that are currently in the market to raise fresh capital include Byju's and WhiteHat Jr. Bengaluru-based Vedantu has raised $24 million from investors led by GGV Capital, with participation from existing backers.

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