In a significant move within the edtech sector, Unacademy is in discussions to merge with K12 Techno, the operator of Orchids International Schools, sources told Entrackr. This merger could mark the first major consolidation in the edtech space, which has faced a funding drought over the past two years.
“The two companies have been discussing the terms of the merger for the last four weeks,” said one source, requesting anonymity. “If the merger is successful, both companies will own 50% each in the joint entity.”
Unacademy invested in Orchid Schools (K12 Techno) three years ago, with Peak XV being a common investor in both entities. Previously, Unacademy attempted to acquire Orchid Schools in 2021, but those discussions did not materialize.
“The contours of the merger, including the valuation of the combined entity, are yet to be finalized,” added another anonymous source.
“We decline to comment on this speculation,” stated a K12 Techno Services spokesperson. Unacademy did not respond to queries until the publication of this story.
K12 Techno, founded 14 years ago, provides comprehensive education, content, and technology services to over 900 educational institutions across India. It offers management services to ICSE and CBSE curriculum schools from kindergarten to class XII in cities such as Bengaluru, Mumbai, and Gurugram under the ‘Orchid’ brand.
According to TheKredible, K12 Techno reported Rs 382 crore in revenue for FY23, with a loss of Rs 39 crore. The firm aims to close FY24 with Rs 450 crore in revenue and an EBITDA of nearly Rs 100 crore.
Recently, Venturi Partners acquired a $27 million stake in K12 Techno Services from Navneet Learning LLP, a subsidiary of Navneet Education Limited.
Softbank-backed Unacademy raised $440 million in its last equity round led by Temasek, valuing the company at $3.44 billion in August 2021. For FY23, Unacademy saw a 26% increase in operating revenue to Rs 907 crore while reducing losses by nearly 40% to Rs 1,004 crore. At the start of FY24, Unacademy claimed it was nearing profitability at the group level.
The company has yet to file its audited financial statements for FY24.
Source: Entrackr
