Unacademy raises fresh funds at $2-bn valuation

Unacademy on Wednesday said it has raised fresh funds from new investors Tiger Global Management and Dragoneer Investment Group at a valuation of $2 billion. Persons familiar with the transaction said the ed-tech firm has raised between $75 million-$100 million. The latest infusion comes less than three months after SoftBank led a $150-million funding round, giving it the status of a unicorn with a valuation of $1.45 billion. Earlier this year, the Bengaluru-based firm raised $110 million from Facebook, General Atlantic and a clutch of other investors. The company’s total fund tally now stands at over $400 million.

The ed-tech sector has cornered the bulk of the start-up funding this year as students across the country have signed up for ed-tech services to make up for lost school hours. Experts point out ed-tech is growing on the back of changes in the approach to education and the rapid rise in the use of smartphones. Of the three broad categories — K-12 supplementary teaching for grades 1-12, test-preparation and higher education — analysts at HSBC reckon K-12 offers the most potential.

“K-12 is unsurprisingly the biggest opportunity and we think the market can grow up to $5bn in five-seven years. Test-prep, which is higher education and government examinations, could be a $1.5-billion opportunity over a similar time frame,” Yogesh Aggarwal and AbhishekPathak wrote in a recent report.

Unacademy claims to be conducting more than 150,000 live classes on the platform each month and said the collective watch time across platforms is over two billion minutes per month.  In an interview with local media earlier this year, co-founder and CEO Gaurav Munjal had said the firm hoped to grow ten-fold in three years.

Rival Byju’s has already raised over $1 billion in funding so far this year and is negotiating another $200 million deal with investors. Chan Zuckerberg Initiative, participated in a $113-million funding round for Eruditus. In July, US-based Coatue led a $100-million investment in Vedantu.