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Unacademy : Largest consumer internet story in future?

Introduction

  • Education technology startup providing online coaching for various competitive exams including UPSC, Bank Exams, SSC, Railway, Defence, State Public Service Commission , JEE, NEET, IIT, GATE, CA, CS & many more.
  • Basic idea of Unacademy is to give access of the best teachers to everyone at a much affordable price; available to students without making them travel; thus no discrimination amongst the students. Hence, Students get equal access to classes as there is no batch system which is there in physical classes’ batch system.
  • Company offers various test series & one-on-one interactions with educators to clear students’ doubts.
  • Company is registered as Sorting Hat Technologies Private Ltd.

About the Founders

1. Gaurav Munjal

Mr. Gaurav is the co-founder & CEO of Unacademy. In order to share with friends, he uploaded a short video tutorial on computer graphics on YouTube. After good response, he also uploaded more videos on computer programming. He worked at Directi as software engineer & later setup his company “Flat.to” renamed as “FlatChat”. Mr. Gaurav is a graduate computer science from NMIMS University, Mumbai.

2. Roman Saini

Mr. Roman Saini is co-founder & Chief Educator at Unacademy. He left the Indian Administrative Services (IAS) to contribute more to India’s education system. Thus, joined hands with Gaurav and Hemesh to form Unacademy. He completed his Bachelor of Medicine, Bachelor of Surgery (M.B.B.S.) from All India Institute of Medical Sciences (AIIMS), New Delhi in 2013. Mr. Saini became an IAS officer at the age of 22 with rank of 18th in the civil service examination 2013.

3. Hemesh Singh

Mr. Hemesh is Co-Founder & Chief Technology Officer (CTO) at Unacademy. He was also the co-founder & CTO of Flatchat. He did his Bachelor degree in Engineering from Motilal Nehru National Institute of Technology, Allahabad.

How the company started

Gaurav Munjal, Roman Saini & Hemesh Singh found ‘Unacademy’ in the year 2015.

2010

Mr. Gaurav Munjal started a Youtube channel & uploaded videos to teach the subjects of competitive exams.

2015

Prior to setting up Unacademy, Mr. Gaurav & Mr. Hemesh Singh found an another startup “Flatchat”. Flatchat enabled easy & quick chatting connectivity between a seeker, a prospective owner, a tenant to potential flatmates & other seekers. The company raised USD 2.5 million from CommonFloor.com (one of the leading real estate portals of India). Later in 2016, Quicker acquired CommonFloor & continued as an individual brand under QuikrHomes.

2015

Eventually, Youtube channel gained popularity. And then Mr. Gaurav & his friends decided to start a startup under the name of Unacademy.

2017

Bhavin Turakhia, entrepreneur & founder of Flock, Radix, CodeChef & Zeta, joined the board of company in August.

By August 2017, Unacademy hosted courses by more than 750 educators & 50,000 lessons.

2018

In order to increase their presence, Unacademy acquired Jaipur-based online exam preparation platform ‘Wifistudy’ (Found by Dinesh Godara in 2013) in a cash and stock deal. Wifistudy had a stronghold in smaller towns & that is why it was acquired. Although this is a complete acquisition but Wifistudy continues to operate under leadership of its founder, Mr Dinesh Godara.

2018

Gaurav Munjal, Roman Saini and Hemesh Singh were included by the Forbes in Forbes 30 under 30 of India.

Funding Rounds

May 2016

Unacademy raised $500,000 in seed round funding from various investors. Unacademy utilized these funds for product development & adding more educators on platform. The investors included Blume Ventures, Rajan Anandan (Google India Head), Sumit Jain (Co-founder – CommonFloor), Aprameya Radhakrishna (Co-founder – Taxi4Sure), Sujeet Kumar (former Flipkart senior executive), Phanindra Sama (Co-founder – redBus).

August 2016

In 2nd round of seed funding, Unacademy raised $1 million from existing as well as new investors. Investors in this round – Blume Ventures, Stanford Angels India, WaterBridge Ventures & Tracxn Labs. Individual investors included Flipkart’s Sachin Bansal , Binny Bansal, Paytm’s Vijay Shekhar Sharma, Freecharge’s Kunal Shah, Sandeep Tandon & Ashish Tulsian. Other existing investors also participated in this round. The purpose of the fund raise was product technology, research & development and hiring.

January 2017

Then, Unacademy raised $4.5 million in a Series A funding led by Nexus Venture Partners & Blume Ventures along with Girish Mathrubootham (CEO – Freshdesk), Ananth Narayanan (CEO – Myntra) & Stanford Angels. Company aimed to increase the number of educators from 200 to 2000 at the end of 2017.

September 2017

In Series B round of funding, Unacademy raised $11.5 million from Sequoia India & SAIF Partners. Existing investors Nexus Venture Partners & Blume Ventures also participated in this funding round.

July 2018

Further, Unacademy raised $21-million in Series C funding round. Investors participated – Sequoia India, SAIF Partners, Blume Ventures & Nexus Venture Partners. Total funds raised including this, amounted to $38.6 million. The purposes of this round was to bring new educators, improving the core product & technology team, building position in Indonesia & adding further categories to their portfolio like pre-medical, GATE and CAT. Post funding valuation of the company amounted to $100 million.

June 2019

The company raised $50 million in Series D funding round. Steadview Capital, Sequoia India, Nexus Venture Partners & Blume Ventures are the main investors. Aakrit Vaish (co-founder and CEO, Haptik), Sujeet Kumar (co-founder and CEO, Udaan) and Unacademy founders Gaurav Munjal & Roman Saini also participated in the round. Post funding valuation of the startup amounted to $225 million.

February 2020

With investment from investors like Facebook & General Atlantic, Unacademy raised $110 million in Series-E funding. Also, existing investors participating in this round are Sequoia India, Nexus Venture Partners, Steadview Capital, Blume Ventures, Kalyan Krishnamurthy (CEO – Flipkart) and Sujeet Kumar (co-founder of Udaan). Funds will be used for more test preparation & exam categories, acquire more educators, create better content and improve the product. This round doubles the valuation of startup from has doubled to $500 million from $225 million. Exit is also provided to some investors through this round.

Unacademy Business Model

On Unacademy platform there are free as well as paid videos. Company launched a Subscription plus model around a year ago. This also includes a private discussion forum with live videos & classes in a personalised classroom learning environment with Unacademy’s top educators.

Company’s founder stated that in the first month of Subscription plus model, the company generated around INR 2 crore & in span of 12 months this revenue increased to INR 18 crore. As per the management, the company has over 90,000 active subscribers on the platform. Moreover, more than 10,000 educators are listed on the platform. 70% users are from Tier 2 and Tier 3 cities in India.
In addition, Unacademy’s Youtube channel receives over 150 million monthly views. With rise in paid subscribers
Further, Unacademy expects to earn annual recurring revenue of USD 250-300 million (around INR 1,775 crore to INR 2,130 crore) in the upcoming years.

Financial Performance

Revenue for FY19 is INR 11.70 Crore as against INR 1.8 Crore in FY18. On the other hand, loss of the company increased from INR 23.58 Crore in FY18 to INR 90.27 Crore in FY19. Expenses increased due to heavy spending to retain the talent.

Competitors of Unacademy

  • Global players in this category are Coursera, edX, Udemy, Khan Academy, Udacity. Moreover, in India the main competitors are BYJU’S, Toppr, NeoStencil, Vedantu and Englishleap.
  • Bengaluru based startup BYJU’S which is found by Raveendran in 2011 is valued at $8 billion. BYJU’s targets students from class 4th to 12th apart from IAS and CAT aspiring students.
  • Toppr founded by Hemanth Goteti and Zishaan Hayath in 2013 is also providing online tutoring services. Company tutoring services are available for 20 boards, 60 competitive exams and 40 subjects.
  • Gradeup, also a competitive exam online coaching provider founded in 2013 by Sanjeev Kumar, Shobhit Bhatnagar and Vibhu Bhushan in Noida.
  • Apart from these there are other players in the online competitive exam category are Testbook, Adda247 & Embibe.

Future Vision

Founder, Gaurav Munjal stated that their goal is to become not just the largest educational organization, but the largest consumer internet story out of India.

Unacademy wants to target more students in the rural areas. The company is also focused on technology improvement & adding more creators on platform.

The company also wants to offer online coaching for various state service examinations held in Kerala, Maharashtra, West Bengal & others.

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Sources: Published reports & Articles by management & other media reports.

Disclaimer: The report only represents personal opinions and views of the author. No part of the report should be considered as recommendation for buying/selling any stock. The report & references mentioned are only for the information of the readers about the industry/company stated.

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