These are good times to be an edtech startup in India.
Just two months after Unacademy had entered the unicorn club, it has now raised funds at a $2 billion valuation. “Unacademy Group has raised a new investment round from Tiger Global Management and Dragoneer Investment Group. The funding round values Unacademy Group at $2B,” wrote CEO Gaurav Munjal on Twitter.
Unacademy’s previous fundraise had valued the company at $1.45 billion, so the new round raises its valuation by more than 33% in a matter of 80 odd days.
A lot has happened over this period. Unacademy was a sponsor of the recently-concluded IPL, and its brand would’ve received unprecedented visibility over the last couple of months. This was a good time to splurge on some advertising — reports indicated that Unacademy’s IPL deal could’ve been worth as much as Rs. 130 crore — with colleges and schools shut because of the coronavirus pandemic, people are turning to online learning alternatives. Other ed-tech companies, including Byju’s and Vedantu had also splurged on ads during this period.
Unacademy, though, has been more aggressive than most. Apart from the IPL sponsorship, Unacademy signing up celebrities including Virat Kohli, Anushka Sharma, Vishwanathan Anand and Kevin Pietersen for “masterclasses” on its platform. The efforts seem to have paid off — Unacademy would’ve not only managed to get some visiblity among consumers, but now has seen a smart bump in its valuation.
Challenges, though, will exist for companies in this space. Ed-tech firms are seeing a bump in usage because of the pandemic, but it remains to be seen if these users will stick around when the pandemic is over. Physical coaching institutions, which Unacademy’s online product chiefly competes against, will be raring to go once in-person classes begin again, and how that battle plays out could well determine the future of online education in India.