Owner of Orchid schools K12 Techno in talks to merge with Unacademy: Reports
Media sources have revealed that K12 Techno, the company that operates the Orchids International School chain, and Edtech unicorn Unacademy are in talks to merge. This would be the first significant consolidation in the edtech sector, which has been suffering from a lack of funding for the previous 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 is noteworthy that Peak XV is a common investor in both companies, and that three years ago, Unacademy made an investment in Orchid School (K12 Techno). Unacademy reportedly expressed interest in purchasing Orchid School in 2021, but those talks fell through.
“The contours of the merger including valuation of the combined entity are yet to be finalized,” added the second person who also requested anonymity.
Using a combination of its own brand, curriculum, and technology platform, 14-year-old K12 Techno offers full stack education, content, and technology services to over 900 educational institutions nationwide.
Under the “Orchid” brand, it offers management services to ICSE and CBSE curriculum schools from kindergarten to class X–XII. These schools are located in major cities like Bengaluru, Mumbai, Gurugram, and many other mid-sized cities.
Media reports that K12 Techno made Rs 382 crore in revenue and lost Rs 39 crore in FY23. With an EBITDA of about Rs 100 crore, the company anticipated ending FY24 with revenues of Rs 450 crore.
A $27 million stake in K12 Techno Services was recently acquired by Venturi Partners from Navneet Learning LLP, a division of Navneet Education Limited.
Backed by Softbank In August 2021, Unacademy raised $440 million in its most recent equity round, led by Temasek, at a $3.44 billion valuation. Unacademy’s operating revenue increased by 26% to Rs 907 crore in the fiscal year FY23, while losses were reduced by almost 40% to Rs 1,004 core. The company also stated at the start of FY24 that it was almost profitable as a whole.
The company has not yet submitted its audited FY24 financial statements.
