In a fresh funding round led by Japan’s SoftBank Vision Fund, Unacademy will receive $150 million, the Bengaluru-based educational technology company said on Wednesday.
The capital injection, which has yet to reach the bank, will drive the company’s valuation to $1.45 billion , the company said, second only to Byju’s industry leader and catapult it into the unicorn club – companies worth $1 billion or more – among India’s ed-tech startups.
On August 15, ET announced that Unacademy was in talks to raise $150 million from the SoftBank-led investors.
Also involved in the fundraising round were established investors General Atlantic, Sequoia Capital, Nexus Investment Partners, Facebook and Blume Ventures.
According to the company, in February, Unacademy last raised $110 million from Facebook and private equity firm General Atlantic, valuing $510 million.
The company, which claims to have about 350,000 active paying subscribers, will primarily use the proceeds to launch in less than four weeks its much awaited K-12 offering, which will also see it clash head-to – head with Byju, India’s largest ed-tech firm. Even Unacademy aims to introduce more niche products including chess subscriptions and computer programming.
According to Gaurav Munjal, Unacademy’s co-founder and chief executive, some early angel investors took partial exits after the round was closed but he declined to offer names.
Sumer Juneja, partner at SoftBank Investment Advisers, said, “We have been closely monitoring Unacademy for the past 18 months and were impressed by its growth, product quality and customer engagement. In India they are really democratising education and we look forward to helping them grow even higher.
According to Munjal, the SoftBank money is expected to get wired in the next few weeks. The organisation has already raised an estimated $260 million in the 2020 calendar year and is planning for the next 18 months to be positive in cash flow.
This is the first investment SoftBank Vision Fund made in an Indian company after eyewear retailer Lenskart backed it in December. The investment will originate from SoftBank Vision fund-2. The prominent technology investor has slowed down on new bets internationally over the past year, cutting back on testing in WeWork portfolio company after the IPO fiasco.
Other large Indian portfolio companies from SoftBank Vision Fund, such as the budget hotel chain Oyo and digital payment platform Paytm, were also under the scanner due to mounting losses.
The funding comes in the face of increased interest from investors in the online education sector, which has seen stupendous growth in the Covid-19 pandemic.
This is the first homegrown unicorn startup in the fund for Unacademy’s first investor, Blume.
“We haven’t missed a round at Unacademy,” said the company’s early backer, Karthik Reddy, founder of Blume Ventures. The fingerprint rule is simple. Do we think that from here, the founder will build beyond 5x? If so, let’s play and try. And so we have done”, he added.
Unacademy counts among others a host of angel investors such as redBus founder Phanindra Sama, Flipkart CEO Kalyan Krishnamurthy, TaxiforSure co-founder Aprameya Radhakrishna, Udaan co-founder Sujeet Kumar, and Paytm founder Vijay Shekhar Sharma.
Byju ‘s valuation rose to $10.5 billion, from $8 billion in January, while Vedantu ‘s live online learning platform also recently saw its valuation rise to $600 million.
Last week, Ed-tech company Eruditus raised $113 million from investors led by Facebook founder and CEO Mark Zuckerberg and the philanthropic organisation of Priscilla Chan, the Chan Zuckerberg Initiative, to $800 million for its valuation.