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Exclusive: Unacademy in talks to merge with Orchid schools owner K12 Techno

EntrackrEntrackr · 1y ago
Exclusive: Unacademy in talks to merge with Orchid schools owner K12 Techno
Medial

Edtech unicorn Unacademy is in discussion to merge with K12 Techno, which runs the chain of Orchids International Schools, three sources told Entrackr. This would be the first major consolidation in the edtech space which has been witnessing funding drought in the past two years. “The two companies have been discussing the terms of the merger for the last four weeks,” said one of the sources requesting anonymity. “If the merger gets through, both companies will own 50% each in the joint entity.” It’s worth noting that Unacademy made an investment in Orchid School (K12 Techno) three years ago, and Peak XV is a common investor in both companies. Sources assert that Unacademy also wanted to acquire Orchid School in 2021, but the discussions didn’t materialize. Queries sent to Unacademy and Orchid Schools remain unanswered until publication of this story. We will update the story in case they respond. The 14-year-old K12 Techno provides full stack education, content, and technology services to more than 900 educational institutions across the country through a combination of its own brand, and curriculum and technology platform. It provides management services to ICSE and CBSE curriculum schools from kindergarten to class X-XII, based in metros like Bengaluru, Mumbai, Gurugram and many mid-sized cities under the ‘Orchid’ brand. According to startup data intelligence platform TheKredible, K12 Techno registered Rs 382 crore in revenue in FY23 with Rs 39 crore loss. The firm expected to close FY24 with Rs 450 crore with EBITDA of nearly Rs 100 crore. Recently, Venturi Partners purchased a $27 million worth stake in K12 Techno Services from Navneet Learning LLP, subsidiary of Navneet Education Limited. Softbank-backed Unacademy raised its last equity round of $440 million led by Temasek at a valuation of $3.44 billion in August 2021. ​During fiscal year FY23, Unacademy saw a 26% jump in its operating revenue to Rs 907 crore while controlling losses by nearly 40% to Rs 1,004 core. In the beginning of FY24, the company also claimed that it was close to profitability at the group level. The firm is yet to file its audited financial statements for FY24.

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Venturi picks up over 5% stake in Peak XV-backed K12 Techno for $27 Mn

EntrackrEntrackr · 1y ago
Venturi picks up over 5% stake in Peak XV-backed K12 Techno for $27 Mn
Medial

Venturi Partners has announced a purchase of a $27 million worth stake in K12 Techno Services from Navneet Learning LLP, subsidiary of Navneet Education Limited. This is the second secondary round in K12 Techno in the last eight months. In a stock exchange filing, Navneet Education Ltd disclosed that it will divest 5.12% stake in K12 Techno against $27 million. It will also retain a 14.35% stake in the firm after this transaction. This roughly valued the Bengaluru-based firm at around $540 million. Investing out of its $180 million maiden fund, Venturi will join K12 Techno’s existing shareholders such as Peak XV Partners, Kedaara Capital, Sofina Ventures, and Navneet Learning LLP, to support the management team led by Jai Decosta, CEO of K12 Techno. For the uninitiated, K12 Techno runs the chain of Orchids International Schools. The 14-year-old company provides full stack education, content, and technology services to more than 900 educational institutions across the country through a combination of its own brand and a curriculum and technology platform. The firm provides management services to ICSE and CBSE curriculum schools from kindergarten to X-XII, based in large metros like Bengaluru, Mumbai and Gurugram under the ‘Orchid’ brand. As per the company, its brand, content and technology has been used by over 300,000 students in the K-12 space in India. It also claimed to have grown at a CAGR of 40% over the last five years. In September, K12 Techno raised investment from Kedaara Capital against a significant minority stake in the company. It also provided a partial exit to Peak XV Partners (formerly known as Sequoia Capital India). Check startup data intelligence platform TheKredible for the complete shareholding pattern. With this, K12 Techno will join Venturi Partners’ portfolio of consumer-focused investments in India and Southeast Asia which includes Livspace, Country Delight, Believe, Pickup Coffee, and DALI. According to TheKredible, the company registered Rs 382 crore in revenue in FY23 with Rs 39 crore loss. The firm expected to close FY24 with Rs 450 crore with EBITDA of nearly Rs 100 crore.

Unacademy narrows down losses by 62% in FY24; revenue remains flat

EntrackrEntrackr · 9m ago
Unacademy narrows down losses by 62% in FY24; revenue remains flat
Medial

Unacademy recorded Rs 988.4 crore in total revenue during FY24, a 5.33% decline compared to Rs 1,044 crore in FY23. However, the SoftBank-backed firm cut its losses by 62%, reducing them to Rs 631 crore in the fiscal year ending March 2024 from Rs 1,678 crore in FY23. Unacademy managed to narrow its losses through cost-cutting measures, including restructuring, according to a document reviewed by Entrackr. According to TheKredible, Unacademy’s operating revenue grew by 26.15% to Rs 907 crore in FY23, up from Rs 719 crore in FY22. Unlike FY23 and FY24, the firm’s revenue has now been largely dependent on the offline model. Unacademy’s online business grew massively during the pandemic (FY21 and FY22), but the entire edtech space lost momentum after the reopening of offline educational institutions, including coaching centers and colleges. The company’s EBITDA loss also improved, decreasing to Rs 489 crore during FY24 from Rs 1,553 crore in FY23. At the same time, the edtech firm had Rs 1,573 crore in cash and cash equivalents as of March 2024. Unacademy connects educators and learners in various fields by offering a range of courses. The company generates revenue through subscriptions to both online and offline learning services. According to documents, FY24 marked a significant improvement in cost efficiency, and the cost rationalization initiatives undertaken during the year are expected to yield positive results in FY25 and beyond. For context, in August 2024, Unacademy announced it would not be providing appraisals for employees in 2024. Founder Gaurav Munjal stated that the company has a strong financial runway and is not at risk of survival. To streamline operations and improve efficiency, the Bengaluru-based company also laid off 250 employees. These financial developments come at a time when Unacademy is considering merger and acquisition opportunities. In June, Entrackr exclusively reported that the SoftBank-backed firm was in early talks to merge with K12 Techno, which runs the chain of Orchids International Schools. In terms of fundraising, Unacademy has not raised capital for over three years. Its last equity round was a $440 million Series H in August 2021, at a valuation of $3.44 billion.

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