General Atlantic, GGV Capital in talks to invest in Unacademy2 min read . Updated: 10 Dec 2019, 09:22 AM IST
Unacademy, which is looking to raise $100 mn, will likely see more investors like Singapore-based GIC
MUMBAI : 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.