Unacademy started a free-coaching revolution, then got sold at a 94% discount

Roman Saini- and Gaurav Munjal-led Unacademy transformed the preparation for the UPSC Civil Services Examination and other competitive exams with free online classes before its valuation peaked at $3.44 billion. Rival upGrad has now acquired the ed-tech platform for just over $200 million, about 94% below that peak. But Unacademy's real impact lies somewhere between these numbers.

Posting a story on Instagram on Monday, comedian Samay Raina congratulated his friend Gaurav Munjal for "selling his company, Unacademy, for just 200 million dollars when he could have sold it earlier at 3.4 billion dollars." Unacademy co-founder Munjal took the roast sportingly. "Who needs enemies when you have such friends :)," Munjal wrote, reacting to it.

The exchange between Munjal and Raina captured the staggering fall of Unacademy and its value, after rival upGrad acquired the ed-tech platform for just over $200 million. That is about 94% below Unacademy's peak valuation of $3.44 billion in 2021. The acquisition is a 100% share-swap deal, which means Unacademy's shareholders will get upGrad shares instead of cash.

Unacademy's roots go back to a YouTube channel started by Munjal in 2010 before it became a full-fledged platform in 2015. It was founded by Munjal, Roman Saini and educator-entrepreneur Hemesh Singh in 2015.

Saini, an AIIMS Delhi MBBS graduate who secured All-India Rank of 18 in the 2013 Civil Services Examination, quit the Indian Administrative Service (IAS) to build Unacademy after completing his first phase of training at the Lal Bahadur Shastri National Academy Of Administration (LBSNAA), Mussoorie, and being posted as an assistant collector in Madhya Pradesh's Jabalpur.

For UPSC aspirants accustomed to expensive coaching classes in Delhi's Mukherjee Nagar and Old Rajinder Nagar, structured classes offered online for free felt almost unheard of. While Unacademy started paid programmes later, its hours-long free lessons on YouTube and its website remained a goldmine even as it expanded to other competitive examinations.

BACK IN 2015, FREE UPSC COACHING FELT REVOLUTIONARY

I remember the excitement among aspirants when Saini and Munjal launched Unacademy for UPSC preparation in 2015.

Saini, who completed his MBBS from AIIMS New Delhi at 21 and cracked the Civil Services Exam at 22, was its credible and recognisable face. Leaving the IAS within months of joining, and launching a free platform, were seen as huge decisions among civil service aspirants.

Munjal, meanwhile, drove the business side. Hemesh Singh took care of the tech.

Soon, top UPSC educators whom aspirants revered and trusted, joined in. Big names like Supreme Court lawyer Sidharth Arora, the Sardar Patel Institute of Public Administration's Pratik Nayak, Ahmedabad-based Mrunal Patel and history and polity coach Mahipal Singh Rathore, associated themselves with Unacademy. While these top educators had their paid courses, they also recorded hours-long free classes, covering the full syllabus of their subjects and uploaded them onto YouTube.

Faculty members from major institutes, including Vajiram and Ravi, Vision IAS, and Rau's IAS also joined. While having a separate subscription model disappointed some aspirants who had celebrated the free coaching, free videos stayed on their app and portal. Paid courses involved live classes, structured batches and mentoring benefits with the educators.

Saini has now said what followed was a revolution. "When we started posting videos on YouTube, very few smart people were teaching online. Being an educator was still looked down upon. I remember that within the first month itself I must have called 200 people to teach online. This led to a revolution bigger than we had imagined," he said.

UNACADEMY GAVE TEACHERS BOLLYWOOD STARS-LIKE PAY PACKAGES

During the Covid lockdown, when educational institutions shut down, Unacademy witnessed explosive growth.

At the Covid pandemic's peak, Saini said Unacademy hosted over one lakh live classes monthly and had almost one million paid subscribers. Its free-video-to-paid-course model soon spread across test preparation. Platforms such as Physics Wallah, Adda247, StudyIQ and Vedantu later used the same broad model. Physics Wallah became its clearest parallel, growing from Alakh Pandey's free YouTube lessons into a paid learning platform.

Unacademy also turned teachers into nationwide brands and raised what leading educators could earn. UPSC Educator Amit Kilhor said, "Unacademy single-handedly changed the Income Tax Return of educators. No one else could have done it. To pay packages what Grade A Bollywood stars get, to teachers was unheard of and unimaginable. Unacademy walked the path first where others could run later."

"Unacademy's free platform created a generation of celebrity educators. Educators are a cornerstone of any economy, and they should be celebrated, and our platform enabled that in our country. Their YouTube videos crossed 10 billion views," the edtech platform's co-founder Munjal said.

Unacademy also moved beyond regular classes during Covid with a segment, Legends on Unacademy. It featured sessions with Virat Kohli, Mary Kom, Shashi Tharoor, Kiran Bedi and other prominent personalities. It subsequently partnered with Arunabh Kumar's TVF on popular web series such as Kota Factory, Aspirants and its spin-off Sandeep Bhaiya, and with MTV on the 10-episode music show, Unacademy Unwind.

THE MATHS BEHIND UNACADEMY'S 94% FALL

Unacademy raised $440 million in August 2021 at a valuation of $3.44 billion, its Covid-pandemic-era peak. The upGrad transaction values it at roughly $206 million. So, subtracting $206 million from $3.44 billion and dividing by $3.44 billion gives a decline of about 94%.

It would, therefore, be more precise to call the deal a 94% markdown from Unacademy's peak valuation than a literal "discount". However, Munjal did not hide the fall. "Six years ago today, Unacademy became a unicorn. Today, Unacademy has closed its acquisition by UpGrad for just over $200M. We raised at a peak, but sold at a fraction of that. I'm not going to dress these facts up. But I am proud of what this team did between those two numbers."

Munjal said Unacademy had a top-line of around Rs 400 crore, Rs 900 crore in the bank, and that most of its businesses were profitable or near-profitable. He said nobody forced the transaction, which presented upGrad as the ambitious route. The price measures its valuation fall. And, the free videos and boom in the educator economy explain why its impact cannot be measured by price alone.

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