After acquisition spree, edtech startup Unacademy aims to enhance product experience, grow test prep business
The Indian edtech space is booming with new acquisitions. Last month, edtech unicorn Unacademy acquired live game-streaming platform Rheo TV for an undisclosed amount.
Rheo TV is Unacademy's eighth acquisition since March 2020, following the acquisitions of Kreatryx, CodeChef, PrepLadder, Mastree, Coursavy, NeoStencil, and TapChief.
The SoftBank, General Atlantic, Facebook, and Tiger Global-backed company is doing a land grab of sorts across learning segments as India's edtech sector witnesses a major consolidation wave since the COVID-19 outbreak.
During an interaction with YourStory, Vivek Sinha, COO, Unacademy, says, “The acquisitions at Unacademy never happen just because of the fear of missing out.”
Vivek says there were very strong post-acquisition synergies in each acquisition in terms of onboarding a good team, acquiring quality content, and a very loyal user base.
Additionally, the test prep business — the most mature business at Unacademy — is growing at a rapid pace. Thus, he claims, the startup is under no pressure to grow inorganically, but if a worthy asset comes along, the company will look into it.
That’s not all.
The Unacademy growth story
The edtech major also raised $440 million in its latest Series H funding round, which now values the company at around $3.44 billion.
Vivek says a large proportion of the funds will go into augmenting the startup’s product experience, cementing its test prep business, and focusing on its pre-level and Graphy categories.
“We believe that we have built the best product in the K-12 space,” he says, adding the startup aims to make the product available to more learners.
The round was led by Temasek Holdings, with participation from Mirae Assets. Existing investors, including Tiger Global, General Atlantic, and SoftBank Vision Fund 2, also participated.
Moreover, OYO Rooms CEO Ritesh Agarwal and Zomato Founder Deepinder Goyal also partnered with the edtech unicorn.
“This fundraise gives us enough ammunition to execute our vision for the next few quarters,” Vivek says.
Unacademy is interested in the recruitment space as it gels well with the edtech space. In fact, the company also wants to distribute online goods and help creators in establishing their digital business.
Vivek claims that Unacademy is now looking to expand overseas.
The edtech unicorn saw an overwhelming growth of 10X in the pre-pandemic phase; the pandemic further accelerated growth.
Vivek adds, “More than half of the business now comes from new categories that were launched in the last 12 months.”
The Bengaluru-based company plans to cement its position by investing heavily in quality and exploring other models in the K-12 space, focusing on acquiring a reasonable market share in the said segment.
He adds that its Customer Acquisition Cost (CAC) has come down in the mature categories, while in the newer categories bringing down the CAC is not a near-term focus.
Vivek explains that valuations are not milestones that need to be celebrated, but “it feels great when such strong backers show faith in our vision.”
Edtech is a large space, but in the long run, besides building product and content, building a brand that is perceived to be trustworthy and transparent matters.
“I believe that the most trusted brand is going to be the winning brand in the category, and I am very confident about the fact that Unacademy is the most trusted brand in edtech,” claims Vivek.
Unacademy has 50, 000 teachers on its platform and the figure is rising rapidly. It will grow further once Graphy and K-12 start growing by the end of the year.
In terms of students, it has around six lakh paid subscribers on the platform, and the startup expects this number to increase to 10-12 lakh by the end of 2021.
Unacademy is hoping to achieve a 10x growth in terms of absolute revenue by the end of FY22. “As a management team, we won’t be satisfied with anything less than that,” Vivek says.