🤯 Unacademy spends Rs 60,000 to acquire a single user!
With 1000 employees laid off and an ongoing funding crunch, was the 40 Cr spent on IPL Ads worth it? Let's find out!
VCs absolutely LOVE ed-tech startups!
In 2021, they became the 3rd largest funded sector with a capital infusion of $4.7B. And the money is showing in form of their massive ad spending.
I am sure you've witnessed Aamir Khan or Shahrukh Khan randomly pop up on your TV, impressed by how smart the kid has gotten after enrolling on the ed-tech platform they endorse.
Of course, who could even forget Unacademy's IPL ad that brilliantly mixes academics and cricket - 2 of India's household obsessions.
During the 2021 IPL season, ed-tech startups have collectively spent upwards of INR 300 Cr on ad slots. In fact, this year Unacademy alone spent INR 40 Cr on IPL ads!
But, with Unacademy laying off employees (1000 so far) and concerns over an 18-month-long funding crunch, was this 40 Cr spend worth it?
Well, we did some math to see if we can figure this out! Let's get into it 🚀
First, let's trace Unacademy's journey over the years
Unacademy started out as a simple college hobby for co-founder, Gaurav Munjal. He initially launched a YouTube channel and began teaching Java coding classes as an engineering student at NMIMS Mumbai in 2010.
Gaurav was doing very well with the channel and he was also quite famous on Quora. So, naturally, he thought of expanding the venture further.
After having a go at another small startup called Flatchat, Gaurav and his co-founders Hemesh Singh and Roman Saini officially registered the company Unacademy in 2015. The core offering was of course their educational content around Indian competitive exams.
But, unlike the YouTube channel which was directly monetizable, how was the trio planning to make money from the platform?
Well, in 2019, Unacademy officially launched its subscription service which generates most of its revenue. The pricing structure works something like this:
Free Tier — Registered non-subscribed users can access all the recorded educational content for free
Subscription Tier — Subscribed users can access the "Live Classes" by Unacademy educators
Today, Unacademy has reached over 800K paying users, which generates 95% of their operating revenue.
It's fascinating that Unacademy first started as a simple YouTube channel and was then built into a platform. Plus, Gaurav already had a sizeable audience on YouTube and Quora that he built from scratch.
So, we can learn 2 things here:
Dream big, but start small. Begin by solving a problem you & people around you face.
Buildd your audience, before building your product.
Unacademy's spend on IPL Ads
Being the 2nd largest ed-tech startup in India, Unacademy enjoys a lot of attention from VCs.
Its current valuation is $3.44B, after it raised a $440M funding round in 2021. Much like any other VC-funded startup with deep pockets, Unacademy naturally spends a huge amount on growing its user base.
Given the wild popularity of IPL in India and that most of their target audience tunes in to watch IPL, Unacademy spends a ton on IPL ads. They are in fact one of IPL's title sponsors.
But, is all of that ad spend worth it for Unacademy? Well, let's do some math to figure it out!
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Cheers!
Hrishikesh