Japanese conglomerate SoftBank Group has marked its entry in India’s soon-to-be USD 3.5 billion edtech sector by writing a USD 150 million check for online education platform Unacademy.
Existing investors including General Atlantic, Sequoia Capital (India), Nexus Venture Partners, Facebook, and Blume Ventures also participated in the round, Gaurav Munjal, co-founder and chief executive of Unacademy, said in a tweet on Wednesday.
The recent transaction has tripled the five-year-old startup’s valuation to USD 1.45 billion in less than six months, making it the second-most valuable edtech startup in the country after Byju’s.
This is SoftBank’s first investment in an edtech company in India. It invested in Unacademy through its second Vision Fund which was announced in July last year. This is also the first investment by SoftBank in India since last December when it pumped in USD 275 million in eyewear company Lenskart.
Unacademy had reportedly been in touch with SoftBank for the last 18 months with the latter tracking the company’s growth. According to 29-year-old Munjal, his virtual meetings with SoftBank CEO Masayoshi Son during the funding process went smoothly and processes moved fast, a report by local media Mint said.
The Bengaluru-based edtech firm offers a platform where it connects educators to students through a subscription-based model. Upon subscribing, students can get access to video and live lectures that primarily focus on competitive examinations.
“In a young country where only privileged urban Indians with a lot of money could reach exam prep experts, Unacademy has democratized knowledge,” Munjal tweeted.
A Bloomberg report said Unacademy has 30 million registered users and 350,000 paying subscribers, almost four times as many as in February. Currently, it has about 18,000 registered educators on the platform.
Unacademy is Munjal’s third startup, the report added. Although he started offering coding lessons while he was still an engineering student in 2010, he co-founded the company along with Hemesh Singh, and Roman Saini in 2015 under the parent company Sorting Hat Technologies Pvt. While Unacademy offered classes for free initially, it brought in a subscription model in 2019.
According to the Mint report, Unacademy is currently expanding to new categories, such as pastry-making classes and chess tutorials. It is also set to start a program in partnership with Codechef, which it acquired earlier in June, over the next two weeks, the report added. In June, the company launched a new platform called Graphy where anyone can create bite-sized courses on different subjects such as kite-making, cooking, public speaking, among other things.
Since the beginning of this year, Indian edtech companies have been on a fundraising spree. In the first half of 2020, online education startups have raised USD 795 million, as compared to USD 108 million it attracted in the same period last year. The funding momentum in the space has continued well into the second half of the year as well. In July, live tutoring startup Vedantu raised USD 100 million in its series D funding round led by US-based tech-focused hedge fund Coatue Management, with participation from existing investors.
In India, SoftBank’s first Vision Fund has backed logistics firm Delhivery, e-grocery platform Grofers, payment services giant Paytm, mobility company Ola, and hospitality behemoth Oyo, among others. But its portfolio companies in India are yet to turn profitable.