Exclusive: Unacademy set to raise $100 Mn at $3 Bn valuation

Euphoria around edtech isn’t going to subside anytime soon. After Byju’s recent $1 billion round, Unacademy is all set to score a new round at a higher valuation. The company is in talks to raise fresh financing with about $1 billion premium in its valuation, according to two sources familiar with the matter. 

“SoftBank and D1 Capital Partners are in an advanced stage to invest $100 million in Unacademy at a valuation of $3 billion,” said one of the sources on the condition of anonymity. Existing investor SoftBank and along with new investor D1 Capital Partners would co-led the round.” 

Unacademy had raised around $88 million in primary capital led by Tiger Global and Dragoneer at a valuation of $2 billion in November.

D1 Capital Partners is a New York-based venture capital firm. In December, it had backed foodtech major Zomato and recently co-led a $400 million secondary round in Dream11 with TVC and Falcon Edge. 

The second-largest company in the edtech segment after Byju’s, Unacademy claims to have over 500,000 active paid subscribers on the platform as of March 13, 2021. The company has raised around $350 million in primary financing in the past 15 months. 

During the period, it has made over half a dozen acquisitions which include PrepLadder, Mastree, Kreatryx, CodeChef, Coursavy, NeoStencil and most recently management-focused coaching institute Handa Ka Funda.

“The contours of the deal are finalised and both lead investors have already given a term sheet. If nothing goes wrong from here, the deal will be announced soon,” said the second source who also wished to be anonymous as the talks are private.

Queries sent to Unacademy and SoftBank did not elicit an immediate response. We’ll update the story in case they do. D1 Capital Partners couldn’t be reached for immediate queries.

Unlike most of the secondary deals that happen at lower valuation, Unacademy had concluded a secondary transaction at a similar valuation in which it raised its primary round in November. Tiger, Dragoneer, Steadview and General Atlantic had acquired $50 million worth of shares from existing investors at the same valuation ~ $2 billion.

On the back of increased usage of its core business - test preparation - in the past year, the company is claiming to turn operationally profitable by June 2021 in its test-prep vertical. Meanwhile in FY20, Unacademy had posted operating revenue of Rs 65 crore with a loss of Rs 300 crore.

Of late, SoftBank and Tiger Global are on an investment spree in India. While Tiger has already invested in over half a dozen startups in 2021, SoftBank has led a $300 million round in Meesho and is in talks to pump big rounds into Swiggy, Ola Electric, Zeta and Whatfix.