Unacademy has raised $440 million in a new financing round as the Indian online learning startup looks to expand into multiple additional categories.
Temasek led the Bangalore-based startup’s new financing round while Mirae Asset and existing investors including SoftBank Vision Fund 2, General Atlantic, Tiger Global as well as Zomato co-founder and chief executive Deepinder Goyal and Oyo founder Ritesh Agarwal participated in it, the startup said without disclosing the name of the new round (which should be Series G).
The new round values the six-year-old startup at $3.44 billion, up from $2 billion in November last year. The investment brings Unacademy’s to-date raise to about $860 million.
The online learning platform, which began its journey on YouTube and still uses Google’s video platform to on-board educators, helps students prepare for competitive exams to get into college, as well as those who are pursuing graduate-level courses.
On its app, students watch live classes from educators and later engage in sessions to review topics in more detail. The startup has over 50,000 educators on its platform, many of whom are very popular on YouTube. These educators help Unacademy sell more subscriptions and in return get a commission, according to industry executives familiar with the business arrangement.
Unacademy has amassed over 6 million monthly active users (over 600,000 of whom pay for the service) in over 10,000 cities in India.
Gaurav Munjal, Unacademy co-founder and chief executive, said the startup will deploy the fresh capital to broaden its bets on new categories such as upskilling, jobs and hiring.
Relevel is “giving people a path to get their dream job irrespective of their educational background, while Graphy is “empowering creators to build their online businesses to sell digital goods including NFTs,” he said in a tweet.
In a recent conversation with TechCrunch, Munjal said he wants Unacademy to become the “Tencent of India.”
The startup competes with scores of firms including Byju’s, which is India’s most valuable startup (at $16.5 billion valuation), GGV-backed Vedantu, Tiger Global-backed Classplus, and Lightspeed Venture-backed Teachmint.
All these startups have reported growth in the past year as India — like most other countries — enforced lockdowns and closed schools to contain the spread of the coronavirus.
At stake is India’s online education market, which is estimated to grow to be worth about $20 billion by 2030 (up from about $1 billion last year), according to Bernstein.
As of last year, there were about 6 million students in India who were paying for an online learning app, a figure Bernstein analysts expect to reach about 70 million by the end of the decade.
Spendings on education in India is among the highest globally (Source: A report from analysts at Goldman Sachs to clients last year.)
Unacademy said last week it was creating a $40 million fund for educators on its platform. “On Day One (which is today) we already have more than 300 Educators eligible for the Grant which they will get immediately. Over the next few years we will give Grants of over $40M to our Educators,” said Munjal in a tweet.
The new investment comes at a time when Indian startups are raising record capital and a handful of mature firms are beginning to explore the public markets. Business-to-business commerce and financing startup Ofbusiness said over the weekend it had raised $160 million in a new financing round (led by SoftBank Vision Fund 2) at a valuation of $1.5 billion, becoming the 18th Indian startup to attain the unicorn status, up from 11 last year.
Hello and welcome back to Equity, TechCrunch’s venture capital-focused podcast, where we unpack the numbers behind the headlines.
This week we did something fun and different and good: a live show! A good number of people came, and asked questions, and altogether, it was a blast.
Danny, Natasha, and Alex had a lovely time with the regular work, while Grace and Chris and Kevin made the whole operation function. We’ll likely post a bonus episode of the Q&A on Saturday if people are interested in Equity After Hours.
That aside, what did we talk about in a longer-than-usual episode? Here’s the rundown:
It’s always fun to play around with our show, and thank you to everyone who came out and supported us in our first-ever, but probably not last-ever, virtual live show. We are back to regular, however, starting Monday.
Indian online learning platform Unacademy is in advanced talks to acquire Rheo TV, a less than two-year-old startup founded by two former Unacademy employees, according to three sources familiar with the matter.
The current deal values Rheo TV, a startup that has built a platform to help professional game streamers live stream their gameplays and monetize those feeds, at over $10 million, one of the sources said. The deal proposes Rheo TV’s team of fewer than a dozen people to join Unacademy.
The younger startup counts Lightspeed India Partners, Sequoia Capital India’s Surge, as well as the founding team of Unacademy — Gaurav Munjal, Hemesh Singh, and Roman Saini — among its existing investors.
Munjal and Sequoia Capital India declined to comment. A founder of Rheo TV didn’t immediately respond.
As tens of millions of college students come online and play games, the startup is betting that many of them, provided platforms are able to help them make a living, will consider streaming their gameplays as a viable career option.
Streamers on Rheo TV, which offers several features similar to those of Twitch, are currently rewarded based on their gameplays, followerbase, and past performance in different tournaments.
If the deal materializes, it would be the latest acquisition by Unacademy, the Bangalore-based startup that has amassed over 5 million monthly active users in over 10,000 cities in India.
In the past two years, the Facebook, Tiger Global, and SoftBank-backed startup has acquired WiFi Study, PrepLadder, Coursavy, and led a strategic investment in Mastree.
The startup, which also operates creator platform Graphy, this week unveiled a fund worth over $13 million to help applicants kickstart their online school.
India’s online education market is estimated to grow to $19.7 billion by 2030, up from $1 billion last year, analysts at Bernstein wrote in a recent report.
Soldier-entrepreneurs are unfortunately still a rare breed in Silicon Valley, despite the region’s origins in Cold War defense spending. While the courage and perseverance required to fight in an overseas battlefield (or the office bureaucracy on base) would seem a perfect fit for the travails of the founder, the reality is that the journey from solider to CEO is a long and arduous transition.
A couple of organizations have popped up over the years to make the leap easier. For instance, Patriot Boot Camp, which I profiled back in 2018, works in the earliest days of the startup journey to help veteran founders learn the key skills of building a company and fundraising. Yet, there still remains a lack of networking and funding that particularly targeted this group of entrepreneurs.
That’s the opportunity that Emily McMahan and Sherman Williams, the two managing partners of Academy Investor Network, saw when looking at their peers at the five U.S. service academies. The firm is targeting a final first fund of $50 million, and today announced the close of its anchor investor, insurance and financial services provider USAA, which will invest $2.5 million. Prior to USAA, the fund’s first investor was Scout Ventures, which focuses on frontier tech and where McMahan is a venture partner.
McMahan graduated from West Point in 2001 right as the War on Terror began. I “went really straight into the action post 9/11,” she said. From there, she pivoted into a startup targeting the federal market, before founding Capitol Post, which taught entrepreneurial skills to veterans and their spouses and also had a co-working space in northern Virginia before folding into Bunker Labs in 2019.
“My career has always been focused around community, working with entrepreneurs, and really kind of harnessing the energy of the veteran entrepreneur community,” she said. She is based in DC, and also sits on the board of Patriot Boot Camp.
The Pentagon, headquarters of the Department of Defense. Image Credits: Jeremy Christensen/Getty Images
Meanwhile, Williams hails from the Naval Academy, graduating in 2003 before going on four deployments in the midst of the war in Iraq, which started just weeks before his graduation. He ultimately ended up at Chicago’s Booth School, where he studied finance and pivoted his career into investment banking focused on M&A. “I knew I needed to learn a lot,” he said. I “started investing and advising startups while as a banker, and then made made the flip to work with Emily to start AIN Ventures.” He’s based in New York City.
The firm’s first foray into venture was building an investment syndicate composed of alums of the five service academies, which was launched in June 2020. “We’ve got astronauts, we’ve got Navy SEALs,” McMahan said. “We really think that we’re very well positioned as a group, because we’ve all lived it on active duty, and now we continue to see it and continue to serve.” The syndicate has invested in a handful of deals since launching, including into Polco, an online community engagement platform for local governments, and online identity service ID.Me.
“This is also where a lot of our service academy grads are excited to have a seat at that table and help these companies scale, connect, hire, all of those things,” McMahan said. “So we’re really excited to be on par with some of these other institutions — the Harvards, the Stanfords — who also have these types of syndicates.“
Williams said the goal with the syndicate was to work out the investment processes for the firm before turning toward a more traditional VC fund model. They kicked off fundraising in January.
The new fund has a two-track thesis of investing in veterans across industries while also selecting startups building “dual-use” technologies that are useful to the private sector and governments. “Civic technology, disaster tech — think FEMA — defense tech, obviously the military, intelligence agencies, and space tech. Things in and around climate that will affect constituents and governments,” Williams said as examples where he sees the firm investing. “We want the company, when it achieves maturity, to achieve the majority of the revenue outside the government.”
The firm centers its investing around the stage right after product-market fit, although since the veterans pipeline can be a real gauntlet, Williams said the firm will selectively invest at the pre-seed stage there.
The firm is also seeking to diversify the ranks of both venture capitalists and founders. McMahan said, “I’m a female, Sherman’s an African American, you know, even in the military, we’re sort of a unique team, and so we think we are also able to reach out to a much broader audience of underrepresented minorities, women, and groups, and we feel like we’re pretty attractive in terms of that as a team.“
USAA’s anchor investment is perhaps not surprising given the financial services company’s focus on active service members and veterans. It has made other investments and sponsorships around veteran entrepreneurship, including into Patriot Boot Camp. The company has also invested directly in startups such as PrecisionHawk and Coinbase.