Exclusive: Unacademy in talks to merge with Orchid schools owner K12 Techno

Edtech unicorn Unacademy is in discussion to merge with K12 Techno, which runs the chain of Orchids International Schools, three sources told Entrackr. This would be the first major consolidation in the edtech space which has been witnessing funding drought in the past two years.

“The two companies have been discussing the terms of the merger for the last four weeks,” said one of the sources requesting anonymity. “If the merger gets through, both companies will own 50% each in the joint entity.”

It’s worth noting that Unacademy made an investment in Orchid School (K12 Techno) three years ago, and Peak XV is a common investor in both companies. Sources assert that Unacademy also wanted to acquire Orchid School in 2021, but the discussions didn’t materialize.

“The contours of the merger including valuation of the combined entity are yet to be finalized,” added the second person who also requested anonymity.

"We decline to comment on this speculation," said a K-12 Techno Services spokesperson. Queries sent to Unacademy remain unanswered until publication of this story. 

The 14-year-old K12 Techno provides full stack education, content, and technology services to more than 900 educational institutions across the country through a combination of its own brand, and curriculum and technology platform. 

It provides management services to ICSE and CBSE curriculum schools from kindergarten to class X-XII, based in metros like Bengaluru, Mumbai, Gurugram and many mid-sized cities under the ‘Orchid’ brand.

According to startup data intelligence platform TheKredible, K12 Techno registered Rs 382 crore in revenue in FY23 with Rs 39 crore loss. The firm expected to close FY24 with Rs 450 crore with EBITDA of nearly Rs 100 crore.

Recently, Venturi Partners purchased a $27 million worth stake in K12 Techno Services from Navneet Learning LLP, subsidiary of Navneet Education Limited.  

Softbank-backed Unacademy raised its last equity round of $440 million led by Temasek at a valuation of $3.44 billion in August 2021. ​During fiscal year FY23, Unacademy saw a 26% jump in its operating revenue to Rs 907 crore while controlling losses by nearly 40% to Rs 1,004 core. In the beginning of FY24, the company also claimed that it was close to profitability at the group level.

The firm is yet to file its audited financial statements for FY24.

Update: The story has been updated to include the official statement of K12 Techno.