Another one in the basket of Unacademy

Backed by SoftBank, an Ed-tech startup and a tough competitor to the very well known BYJU,Unacademy has been on a shopping spree lately. With the various acquisition by the Ed-tech giant,recent one happens to be a platform that provides face-to-face online tuition, Swiflearn.

Before moving onto the deal, here is an overview of how the Ed-tech industry has performed.

Indian EduTech Industry was one of the fastest growing industries amid COVID19. Currently, India has more than 4400 Edu-Tech startups operational. The rise of the Indian Edu-Tech Industry has been a story in itself.

The global picture shows that this industry is expected to cross 10 trillion US dollars by 2030. How big is this number? Just to compare, Indian GDP is 3.05 trillion US dollars. The ed-Tech industry is expected to cross 3 times that of the current GDP of India. That explains the number of acquisitions that are happening. Globally India ranks Second in terms of Edutech startups. The USA occupies the 1st spot.

Here’s what you need to know about this Acquisition.

Swiflearn is a platform that provides live face-to-face online tuitions for CBSE and ICSE students of grades 1 to 10. Unacademy has been trying to strengthen its position in the K-12 category and optimize its product offering in this space. Swiflearn was founded by Abhinav Agarwal and Anand Bakode in the year 2019 with an aim to provide academic courses and a personalized home tuition experience from top-quality teachers.

Although the deal amount was not disclosed, Swiflearn, prior to this acquisition had raised funds of $3 Million (21.9 Crore Rupees) in its pre-series A funding.

With this acquisition, the valuation of the Ed-tech giant has reached a whopping $3.44 billion. Prior to this deal, Unacademy has raised $440 million in its series H funding. Apart from this Unacademy had also announced Teacher Stock Options (TSOPs) for its educators. Under the scheme, the company will grant over $40 million to all educators on its platform over the next few years.

With that being said, Here are some key legislation and regulatory authority under which M&A are governed in India

• The Companies Act of 2013- Ministry of Corporate affairs who administers the companies act of 2013 is the primary legislation for all the companies in India. The provision of companies acts, along with the rules framed thereunder, govern the corporate actions such as M&A, PE funding etc.
• Foreign Exchange Management Act, 1999 (FEMA) – RBI who administers FEMA looks after the inflow and outflow of the capital in India.
• Foreign Direct Investment Policy (FDI Policy)- FDI policy governs the foreign investment scenarios in India.
• The Securities & Exchange Board of India (SEBI)- The securities market regulator governs the takeover that happens in India under Substantial Acquisition of Shares and takeover regulations of 2011.
• The competitions Act, 2002 – This act governs the merger that adversely affects the competition in India.
• The insolvency & Bankruptcy code, 2016 (IBC) – IBC governs the auctioning of distressed assets under a corporate insolvency resolution process (CIRP).
• The Income Tax Act, 1961 – The income tax department along with the double tax avoidance treaties entered by the government of India looks after the tax implication of the M&A transactions that happens in India.

Thank you.

Regards,
Raj Gudhka,
Kautilya,
IBS Mumbai.