Unacademy - The first unicorn from the Blume Ventures stable

This was originally posted on the Blume Ventures website. It has been reproduced with permission from the author.

Unacademy just closed a $150 million Series F round led by SoftBank. September 2020 thus marks the graduation of our first portfolio company into a unicorn. (We’ve been on other unicorn cap tables, but as a result of our portfolio companies being acquired by them – TaxiforSure by Ola, Runnr by Zomato).

In a brisk five years, we’ve gone from starting a lead cheque of ₹2.25 crore in a ₹3 crore round to a company that has scaled so rapidly on all dimensions that smart investors wanted to buy in at every stage.  

I recall my first run in with Gaurav was when he founded Flat.to. It was much before Unacademy evolved from his YouTube Channel. So, I browsed through my older mail repository (the new account only had the Unacademy history from 2015). 

We had met at an event. Aakrit (Vaish, of Haptik) had funded Gaurav, was mentoring him, and had introduced us. Gaurav wrote to me right after and thus began the journey between Blume and the first of the unicorns from its stable (by the way, most founders who hustle me up at an event don’t write in after – never fully understood why they don’t). 

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Part One: The Flat.to >>> Commonfloor + FlatChat story

Loved revisiting those short mail exchanges 🙂 and retracing the first two years of our seven year history.

October 2013 – Never miss an opportunity to say hello to a customer / investor and leave behind a great first impression.

November 2013 – Engage at every opportunity with the investor

Sanjay (to Sajid and me): (Btw, Gaurav Munjal from Flat.to met me at Exotel event Fri eve in BKC – claims traction – Sajid we should generally track and I suggest you meet also).

January 2014 – Always be marketing, even to investors, especially to investors

March 2014 – (Flashback mail from Gaurav, once we invested in Unacademy)

April 2014 (Congratulations from me to Aakrit and Gaurav on CommonFloor’s acquisition of Flat.to)

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Part Two: The Unacademy story begins

When I looked back at my mails, I now realise that it could well have been a near miss.

The story begins within eight months of the CommonFloor acquisition and the above mail exchange. Gaurav had reached out for a catchup while visiting Mumbai in January 2015. Somehow, the meeting never happened – just timing I guess, nothing more melodramatic than that. 

Paths never crossed after that for five to six months. Then fate cross-connects us again. Sometime in the middle of 2015, I was at an event at the JW Marriott in Bengaluru. Shradha (of YourStory Media) is talking to Gaurav, and then turns to me and says, “you should definitely invest in him, he’s building something exciting”.

It’s Shradha’s way of saying she likes the founder and his story. I look at Gaurav and said: “Of course I know Gaurav – we’ve been chatting since Flat.to”.

His elevator pitch was clean and simple. Democratising education to every corner of the country and then the world.

His YouTube channel from 2010 was his love and proof point, and it had kept growing on the back of his friend Roman’s IAS study tips and hacks. This led to a coffee meeting (maybe as early as the next day) at the Starbucks in Indiranagar 100 ft road, Bengaluru.

Roman Saini was still serving as a District Collector in Madhya Pradesh and couldn’t make it for our first meeting. Gaurav brought Hemesh (currently, the CTO) and Sachin (who’s since left Unacademy) for the first meeting and said he has built a kick-ass FlatChat team under CommonFloor, and it was time for him to go all in on the new venture. Hemesh has been the third pillar of the Unacademy organisational foundation. What an incredibly humble and silent star!

It’s that first meeting a lot of the times, when your gut tells you to partner with a great entrepreneur. 

There are two adjuncts to that statement. You know in the first meeting, because you’ve spent a lot of time obsessing about how this BHAG (Big Hairy Audacious Goal) or a large problem needs to be solved, or there’s been a slow evolution of a relationship with a founder and magic happens over a coffee. 

In this case, it was even better – it was a big slice of both!

I requested Roman to join Gaurav for the pitch to the team at our Mumbai office (given he was the initial draw for content, and as the boy genius turned AIIMS doctor turned IAS officer who was going to give it all up for Unacademy). I think the BHAG scared the Blume team a bit. I managed to stay resolute.

With each passing week, Gaurav would convince one more super angel or the other to join the cap table. We too added a bunch of great angels. We finally closed on the valuation a few weeks later, at yet another event in Mumbai this time. We even snagged Rajan Anandan onto the cap table in the same event. Blume moved to anchor the round.

We ended up paying the highest entry price for a lead cheque on a seed investment – it stayed that way till 2018. Not a moment of regret ever since. The thing with Gaurav is he never once lost sight of the BHAG in the first five years of the Unacademy journey.

I’ve always said and believed that a great founder optimises every term sheet, every team decision, everyday – for one single thing – the largest possible impact and outcome that can be generated by the startup. The minute one starts hedging, everything slowly starts coming apart.

Gaurav has never hedged in all the time he’s been building Unacademy. Such a founder is bound to generate only one type of outcome, whatever the size – a win-win-win for all stakeholders. 

More than the making of a unicorn, it was remarkable to see Gaurav Munjal emerge as the epitome of this embodiment of a winning mindset. We were once told by someone who scouted Virat Kohli for a sports apparel contract at age 19 – that the boy possessed the best of both Dhoni and Sachin. We had seen a few Dhoni personas and Sachin personas in the first five years of the Blume journey; this was the first and the largest of the Virat Kohli personas we have had in the first decade of Blume. And he just keeps growing. 

Part Three: The Unacademy Group – Preparing to own the decade ahead

Gaurav worships great products. He has extracted that gene out of every team member selected for the Unacademy mission. He sees the expanse of education grow wider every quarter.

Learning knows no bounds as they say – and if learning has no boundaries, Unacademy wants to follow its master everywhere. Wherever there’s an opportunity for a great product that can come alive for great learning online, the Group would want to deliver on it.

And it starts with the team at the top – they have a tremendous hunger for their own learning and transmit it to all of us as well. It’s infectious even sitting as investors on a WhatsApp chat. Gaurav probably runs the most dynamic board WhatsApp chat group in the world. And I’m ready to wager a lot on that claim.

The proof is in the exhaustive engagement every day, every week. What this does over many years is that he doesn’t have just investors; he has believers and supporters with this unorthodox method. It doesn’t exhaust us, it exhilarates. 

From pushing the new subscription model only 18 months ago to its subscriber base and raising three rounds in that time frame, to showing 10x growth in 2020, relative to each respective month of 2019, the Unacademy leadership team has quietly identified more areas and teams and equally missionary founders to jump aboard the rocketship. In a period where the world was left reeling under the pressure of COVID, the Unacademy team has probably been amongst the most creative and productive in the country. 

The year 2020 brings the teams of PrepLadder, Mastree, and Codechef into the Group (WifiStudy was the largest of all prior acquisitions) and the Graphy team was incubated and launched in three months flat. The pace is blitz speed. 

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As this current round was shaping up, people asked us if we were selling some of our shares. Were we taking some money off the table? Au contraire, we just invested a small sum in this round as well. The generosity and faith that our LPs (who give us monies to invest) have placed in us has in turn helped us back our conviction in our best founders. 

We may be setting some sort of record in this case in Indian venture history. This round will mark the 8th cheque (across Seed | Seed Plus | Series A | B | C | D | E | F) that Blume has played into Unacademy. We have not missed a round.

The rule of thumb is simple. Do we think the founder will build beyond 5x from here? If so, let’s try and play. And so we did. 

We have taken a ringside seat to the unfolding of an incredible journey – a team led by a once-in-a-decade founder for whom no problem in education is too challenging to conquer. 

Next stop for the rocketship: An Unacademy IPO!