Mumbai: SoftBank Group Corp. is leading a round of venture investment in India’s education startup Unacademy, boosting its valuation to $1.45 billion as online learning surges during the coronavirus pandemic.
Investors in the $150 million funding include existing backers Facebook Inc. and Sequoia Capital, while SoftBank’s money is coming from Vision Fund 2, a successor to its initial $100 billion fund. The startup’s valuation is tripling from $510 million in February.
Bangalore-based Unacademy has distinguished itself in test preparation classes by recruiting star teachers who help attract ambitious students taking everything from civil service and banking exams to programming languages. As classrooms shut during the pandemic, demand has soared for the startup and hundreds of other virtual learning companies in India. Byju’s, which focuses on K-12 online education, is raising funds at a valuation of more than $10 billion, Bloomberg News has reported.
“In a young country where only privileged urban Indians with a lot of money could reach exam prep experts, Unacademy has democratized knowledge,” said Gaurav Munjal, the startup’s 29-year-old co-founder.
In India’s traditional coaching centers, students who crowd hundreds to a room often pay thousands of dollars to learn from celebrity teachers, typically with no personal interaction. Unacademy usually charges $20 to $150 a month for test prep, and offers classes to anyone with a smartphone.
Unacademy now has 30 million registered users and 350,000 paying subscribers, almost four times as many as in February. The platform has more than 18,000 registered educators.
Munjal started Unacademy as a hobby on YouTube in 2010 when he began offering Java coding lessons while still an engineering student. He became one of the most-followed people on Quora for questions about computer science. He founded and sold two other startups before deciding to try building Unacademy into a business.
With co-founders Hemesh Singh and Roman Saini, Munjal registered Unacademy as a brand in 2015 under the parent company Sorting Hat Technologies Pvt. The platform offered free classes during its initial years and started a subscription model in 2019.
Today, Unacademy has videos and live-class sessions, where students can query teachers or exchange notes with each other. Every fourth class is dedicated to taking student questions, and mock tests are scheduled every weekend. Courses range from $20 a month for exam preparation for government-owned banks or Indian railways to $150 a month for the tests to enter civil service jobs or elite engineering schools. It’s expanded into pastry-making classes and chess tutorials.
“Good teachers whose classes were only accessible to the rich and well connected are now available online to people like me,” said Siddharth Jena, a 25-year-old from a city without expert coaching centers who will try to crack the civil service exam next month.
One of them is Sharad Kothari. He spent two decades teaching organic chemistry to classrooms of more than a hundred students in the western Indian town of Kota, a hotspot for test prep schools to get into the prestigious Indian Institute of Technology. Now with Unacademy, Kothari thinks online is a powerful medium for learning, given the ability to scale classes and introduce supportive technologies.
“Initially, I struggled to teach online as there were no students in front of me, there was no energy,” said Kothari, who estimates prominent teachers earn upwards of $125,000 a year. But no longer. “Anybody with a smartphone can sign up for my class and my reach is massive.”
Munjal said his dream was to turn his startup into a unicorn — techspeak for a valuation of $1 billion or more — while in his twenties. He turns 30 on Sept. 8. – Bloomberg