Bengaluru-based online tutoring startup Unacademy said on Wednesday it has raised USD 110 million led by social media giant Facebook and General Atlantic, with participation from existing investors including Sequoia India, Nexus Venture Partners, Steadview Capital, and Blume Ventures. Angel investors such as Kalyan Krishnamurthy, CEO, Flipkart and Sujeet Kumar, co-founder of Udaan also pitched in this round of funding.
Unacademy said the funding will be used to increase test preparation categories, acquire teachers and create better content and product for its users.
Founded in 2015 by Gaurav Munjal, Roman Saini, and Hemesh Singh, Unacademy is a platform for teachers and learners. Educators on its platform can create videos and offer live interactive classes. The startup claims to have 10,000 tutors on its platform who have so far created over 1 million educational videos. The platform said it has more than 30 exam categories that learners can access.
Last year, the startup launched a subscription model for various examinations. Within a span of one year, it said, it gained more than 90,000 active subscribers.
“70% of our users are from tier 2 and tier 3 cities. More than 700 educators take classes on Unacademy every day. We have seen great outcomes across various examinations (conducted by government bodies) like NTA (National Testing Agency), UGC (University Grants Commission), and CSIR (Council of Scientific and Industrial Research) recently,” Unacademy said in a statement.
“We are seeing great learning outcomes through our subscription where learners can take Live classes by these educators. We now have more than 90,000 active subscribers,” said Munjal, Co-Founder and CEO, Unacademy. “Our goal is to democratize education and become not just the largest educational organization but the largest consumer internet story out of India.”
Ajit Mohan, vice president and managing director of Facebook India said, “Facebook is an ally for India’s economic growth and social development, and we are excited about India and it’s rapidly rising Internet ecosystem. With this investment in Unacademy, we are reinforcing our commitment to the Indian startup ecosystem as well as investing in a company that is transforming learning in India.”
Unacademy is Facebook’s second direct investment in India after the social commerce startup Meesho last June.
In fact, Indian edtech startups have continued with their funding streak this year as an increasing number of global investors bet on this burgeoning sector in the world’s second-most populous country.
Just this month alone, at least five ed-tech startups have raised money. Bengaluru-based edtech startup Vedantu received USD 24 million as an extension of its Series C round led by GGV Capital, Delhi-based Coding Ninjas raised USD 3 million from InfoEdge, Noida-based Classplus bagged USD 2.5 million in a Pre-Series A round of funding from Blume Ventures and Sequoia Capital India’s rapid scale-up program Surge, and Gurugram-based gamified learning solutions startup PlanetSpark raised USD 448,800 (INR 3.2 crore) as part of its pre-Series A round of funding.
Meanwhile, the world’s most valued edtech unicorn Byju’s bagged USD 200 million from New York-based private equity fund General Atlantic in the second week of February, barely a month after American hedge fund Tiger Global invested USD 200 million in it.
Tejeshwi Sharma, Principal at US-based investor Sequoia Capital, believes edtech will create more market cap than O2O (online to offline) companies such as food-delivery and ride-hailing services in India.
“Reason: TAM (total addressable market) is comparable and Gross Margin is higher,” he said in a recent tweet adding that he estimates edtech TAM to be worth USD 10 billion by 2025, while gross margins will range between 60-80%.
According to a recent report by a UK-based firm, with 327 online tutoring companies, India is the second-largest edtech market after the US and is expected to touch USD 1.96 billion soon.