Unacademy plans to raise $150 million, led by SoftBank

The funding is set to make it India’s second most valuable ed-tech and value the firm at $1.3 billion.

Ed-tech startup Unacademy is finalizing a deal to raise around $150 million led by SoftBank boosting it’s pre-money valuation to $1.3 billion and become India’s most valuable ed-tech firm after Byju’s, which recently raised capital from Mary Meeker’s Bond Capital at a valuation of $10.5 billion, the Economic Times reported.

Unacademy last picked up $110 million from Facebook and PE firm General Atlantic in February, at a valuation of $510 million. Existing investors will also participate in the latest equity funding round, according to the sources.

Even though there are no comments from either Unacademy or SoftBank, if everything goes well the fundraising will mark the first investment in an Indian firm by SoftBank since December, when it had backed eyewear retailer Lenskart.

The famed technology investor has over the past year slowed down new bets globally, cutting fewer cheques following the IPO debacle at portfolio firm WeWork. Budget hotels chain Oyo and digital payments platform Paytm, SoftBank Vision Fund’s other big Indian portfolio companies, have also been under the scanner due to mounting losses.

SoftBank Vision Fund CEO Rajeev Misra, in April, said that the company was looking to make 15-20 investments in India over the next three months and that it was looking for the right valuations.

As schools and offline tuition centers remained shut due to coronavirus pandemic and nationwide lockdown, Unacademy saw a spike in the number of online learners in the days following the Coronavirus outbreak. According to the startup, it now has 200,000 subscribers compared to 90,000 in February which resulted in 80% revenue growth in April.

The ed-tech startup will also pip rival Vedantu, whose valuation rose to $600 million after it raised $100 million led by Coatue Management in July. Ed-tech is among the handful of internet sectors that have benefitted from the pandemic, with all major players like Byju’s, Vedantu, Unacademy, and WhiteHat Jr, reporting gains as more learners switched to online classes. The investments in leading Indian ed-tech firms also come at a time of consolidation in the sector.

Unacademy recently acquired Chandigarh-based PrepLadder in a $50-million cash-and-stock deal. Byju’s last week announced it would acquire WhiteHat Jr for $300 million to get a foothold in the US ed-tech market, while Vedantu recently invested $2 million in online instant doubt-solving app InstaSolv.