Unacademy Valuation: Indian Edtech Reaches $3.44 Billion

Unacademy Secures $440 Million Funding Amidst Shifting Investment Landscape

India's Unacademy, a prominent online learning platform, has successfully secured $440 million in a recent funding round. This investment arrives as investors increasingly focus on the South Asian market, particularly following regulatory changes in China that have significantly impacted valuations.

Series H Funding Details

Temasek spearheaded the Series H financing for the Bangalore-based startup. Participation also came from Mirae Asset, alongside existing investors like SoftBank Vision Fund 2, General Atlantic, and Tiger Global. Notable individuals, including Deepinder Goyal of Zomato and Ritesh Agarwal of Oyo, also contributed to this round.

This new funding elevates Unacademy’s valuation to $3.44 billion, a substantial increase from the $2 billion valuation recorded in November of the previous year. The total capital raised by Unacademy now amounts to approximately $860 million.

Platform Overview and Growth

Unacademy initially established its presence on YouTube and continues to leverage the platform for educator onboarding. The platform caters to students preparing for competitive college entrance exams and those pursuing postgraduate studies.

Students access live classes delivered by educators and participate in follow-up sessions for in-depth review. The platform boasts a network of over 50,000 educators, many of whom have built substantial followings on YouTube. These educators drive subscription sales and receive commissions based on performance.

Currently, Unacademy serves over 6 million monthly active users across more than 10,000 cities in India, with over 600,000 users subscribing to paid services.

Future Expansion Plans

Gaurav Munjal, Unacademy’s co-founder and CEO, stated that the newly acquired capital will be strategically allocated to expand into emerging areas. These include upskilling initiatives, job placement services, and talent acquisition programs.

Specifically, Relevel aims to provide career pathways regardless of educational background, while Graphy is designed to empower creators in building online businesses focused on digital products, including NFTs.

Vision for Market Leadership

Munjal has expressed his ambition for Unacademy to evolve into a leading consumer internet technology company in India, potentially mirroring the scale and influence of Tencent.

Competitive Landscape

Unacademy operates within a highly competitive market, facing rivals such as Byju’s (India’s most valuable startup, valued at $16.5 billion), Vedantu (backed by TAL), Classplus (supported by Tiger Global), and Teachmint (backed by Lightspeed Venture Partners). TAL’s American depositary receipts have experienced a significant decline recently due to investor concerns following regulatory actions in China.

The growth of these startups has been fueled by the increased demand for online learning during the COVID-19 pandemic, as lockdowns and school closures became widespread across India and globally.

Market Potential and Projections

Analysts at Goldman Sachs estimate that India’s online education market will generate $5 billion in revenue by 2025, a significant increase from the $1 billion recorded last year.

Bernstein analysts predict a substantial rise in the number of students utilizing online learning apps in India, projecting an increase from approximately 6 million in 2021 to around 70 million by the end of the decade.

Educator Support Fund

Unacademy recently announced the creation of a $40 million fund to support educators on its platform. Munjal confirmed that over 300 educators are immediately eligible for grants from this fund, with plans to distribute over $40 million in grants over the coming years.

Broader Investment Trends in India

This investment in Unacademy coincides with a period of record capital inflows into Indian startups. Several established companies are also exploring initial public offerings. Ofbusiness, a B2B commerce and financing startup, recently raised $160 million at a $1.5 billion valuation, becoming the 18th Indian startup to achieve unicorn status, up from 11 the previous year.