Ed-tech Boom: Unacademy shares change hands in $50-million deal

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January 14, 2021 5:00 AM

The infusion comes less than two months after the ed-tech firm raised fresh funds from Tiger Global and Dragoneer Investment Group in a primary financing round at a post-money valuation of $2 billion. Unacademy is understood to have garnered anywhere between $75-100 million from the two firms.

Test-prep, which is higher education & government examinations could be a $1.5 billion opportunity over a similar time frame,” HSBC analysts wrote recently.

Unacademy on Wednesday said it has concluded a fresh secondary transaction round in which Tiger Global, Dragoneer Investment Group, Steadview Capital and General Atlantic have increased their stake in the company. The investors have collectively acquired additional shares worth $50 million from existing backers.

The infusion comes less than two months after the ed-tech firm raised fresh funds from Tiger Global and Dragoneer Investment Group in a primary financing round at a post-money valuation of $2 billion. Unacademy is understood to have garnered anywhere between $75-100 million from the two firms.

In September last year, SoftBank led a $150-million funding round in the company, giving it the status of a unicorn with a valuation of $1.45 billion. In all, the company has so far raised over $400 million from investors.

Investor interest in the ed-tech sector has been heightened as students across the country have signed up for ed-tech services to make up for lost school hours. Of the three broad categories – K-12 supplementary teaching for grades 1-12, test-preparation and higher education – analysts at HSBC reckon K12 offers the most potential. “K-12 is unsurprisingly the biggest opportunity and we think the market can grow up to $5 billion in five-seven years. Test-prep, which is higher education & government examinations could be a $1.5 billion opportunity over a similar time frame,” HSBC analysts wrote recently.

Co-founder & CEO Gaurav Munjal said recently the company wants to start generating cash in the test prep business and “win in another market through another product, which we don’t know as yet”.

Rival Byju’s mopped up more than $1 billion from investors in 2020 and is understood to be negotiating an another $200-million deal with potential investors, including BlackRock and T Rowe Price. Flush with funds, the firm is reportedly looking to acquire Aakash Educational Services in a $1-billion deal.

Unacademy that sees a larger share of its users coming from small towns claims to have over 48,000 educators and learners spread across 5,000 cities. Over 150,000 live classes are conducted on the platform each month and the monthly collective watch time across platforms is over two billion minutes, the firm said.

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