ENTREPRENEURIAL FINANCING (CASE STUDIES)

RAISING FINANCE
&
DEBT FINANCING

SUBMITTED TO: Ms Khushboo

SUBMITTED BY: Pooja Miglani
Roll no: 22
COURSE: M.com(H) 1
CASE STUDY 1- ‘Unacademy: Funding and Business Model’

Unacademy is one of the largest

It is one of the fastest growing
learning platforms in India.
online learning platforms in
Unacademy is providing e-
India, delivering more than 1
platform for educators and for
million video views per day and
keen learners and also bringing a
offering more than 2,500 live
revolution in the Ed-Tech
classes daily.
industry.

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Story Behind The Idea
Unacademy was founded in the year 2015 by Gaurav Munjal,
Hemesh Singh, and Roman Saini. They started Unacademy as a
platform for educators and new-age learners.

Their primary focus is the educators creating educational videos

and offering live classes to students, and students having access to
more than 30 exam preparing categories.

Unacademy has now more than 1 million video lectures and over
10,000 intelligent educators on its platform. The company said they
have 70% of its users are from Tier 2 and Tier 3 cities in india and
they keep on spreading.
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Services/Exams Offered by Unacademy
Unacademy Offers a wide variety of exam preparation video
courses.
● SSC and Bank Exams ● NEET PG Entrance Exam
● Railway Exams ● TET(Teacher eligibility
● Defense Exams test) Exam
● JEE And NEET Entrance ● Management and Foreign
Exam Studies
● State PSC(Public ● CA and CS Entrance
Service Commission) Exam as well as regular
● NET Exam studies
● GATE ESE and IIT-Jam ● CBSE (Class 10 – 12)
Entrance Exam ● Personality Development. 4
Business Model: How Unacademy Earns?
Unacademy follows the Freemium Business model.

Their Youtube channel videos and all the uploaded videos on their
platform are completely free and one can also access that without
signup on their platform.

They engage the students with their free video classes and if anybody
wants more services like Live sessions, practice mocks, etc, they
have to pay for it on a monthly basis.
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They also take care of the educators, by paying some small fee to the
educators on the views per video.

Unacademy made a completely new ecosystem in the education

system.

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Funding rounds of Unacademy
In Sept 2016, Unacademy achieved funding of $500K.(Seed
Funding)

In Aug 2016, it achieved funding of $1 million from investors

Blume, WaterBridge Ventures, Tracxn.(Seed Funding)

In Jan 2017, it achieved funding of $4.5 million in Series A from

investors Nexus and Blume.(Early stage)

In Sep 2017, it achieved $11.5 million in Series B from investors

Sequoia, Saif partners, Nexus, and Blume.(Early stage) 7
Funding rounds of Unacademy(CONTD.)
Late Stage Capital
In May 2018, it achieved $574.3K.

In July 2018, $21 million in Series C from investors Sequoia, Saif

partners, Nexus, and Blume.

In June 2019, $50 million in Series D from investors Sequoia,

Steadview, Nexus, and Blume.

In Feb 2020, $110 million in Series E from Investors Facebook,

General Atlantic, Seqouia Capital, Nexus, Steadview. 8
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Analysis of the case
• In 2016, the company raised “Seed Capital” of a total of $1.5M
which is required to initiate and maintain initial operations of the
firm.

• In 2017, the funding round was called “Early Stage Venture”

which secured a total of $16M and was used to make a presence
in the market.

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Analysis of the case(Contd.)

• In the further round of 2018 and 2019, called “Late Stage

Venture”, the company raised another $71M which strengthened
their position in the market-leading the way for growth and
expansion.

• The gross capital raised comes up to $88.5M, via a total of 6

funding rounds within 4 years. This suggests that Unacademy
was able to pitch in investors by proving the worthiness of its
business model.
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Findings from the case
The funding is usually secured from a combination of Angel
Investing, Venture Capital, Private Equity,Insurance companies, and
Hedge funds.
Seed capital is acquired from Angel Investors, and further
rounds of capital are usually acquired from Venture Capital firms
in return for equity or some sort of stake in the company. Seed
capitalist required to kick-start the operations of the business as per
the plan. After operations start running, the company needs finance
to develop itself and grab a share in the market, which can be
fulfilled by Series A funding. 12
Findings from the case (Contd.)

Coming past the developmental stage, the company needs funds to

diversify, innovate or expand the business. The requirement for
such capital is fulfilled by the Series B funding round. The only
companies that make it to Series C round are the ones that are
quite successful and have stood the tests of time and competition
on the market. This capital may be used for going global or for
scaling new heights in the market quickly. Companies that go till
Series D or E are either trying to make their way before an IPO or
trying to meet goals that were not met by prior rounds
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Conclusion
Therefore, it can be said that Unacademy is either trying to grow
further by going for Series E funding before going public or might
take the route of an IPO in the next step.

The decision to go or to not go public depends on the plan of the

management team, but observing from the trend, it can be said that
the limit to acquire “start-up” capital is soon to deplete as it has
already undergone Series D funding round.

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CASE STUDY 2- ‘Mrs Fields Cookies’
When Debbi Fields was nineteen, she
married an older man, Randy Fields
who was a brilliant economist. She
decided to start a business of selling
cookies when she baked chocolate
chip cookies for friends and family.

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Nobody supported her business idea. Her
cookies were soft and chewy.They needed
to be eaten fresh to taste their best. Field
refused to abandon her idea. Her husband
decided to support her.

FINANCING

The banker who had given them mortgage on their house arranged a
loan. Though, the banker wasn’t agreed with the business idea, he
trusted them to pay back the loan.
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 She opened a small store in Palo
Alto, California, in August 1977.
On first day, she couldn’t sell a
single cookie by noon.

She tried not to panic and worked on a strategy. She started walking
around the shopping arcade offering cookies to the shoppers for
free.
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Her Strategy worked. Customers
started coming to the store to buy
cookies within an hour. She sold $50
worth that day and $75 next day.

She also gave customers free samples to encourage them to buy

cookies. Business grew rapidly and profits were earmarked to pay
off bank loans used to open new stores.
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In 1986, Her husband joined her
business. The business was now
profitable but financing was still
needed to open new stores. They
had to fight constantly with banks
for financing which were not
supporting the business.

DEBT FINANCING TO EQUITY FINANCING

They were tired of dealing with bankers who doubted their business
plan, So they set out to replace debt financing with equity 19
Case Analysis

Background Info: No one believed that Debbi fields would make it.

Business Concept: Customer definition, Value proposition,

Products/Services.

What went wrong?

Centralized administration, unexpected growth

Financing: Bank loans in early stages and equity in growth stages

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Swot Analysis

Strengths: Good Product, experience in market, Variation of

Packages.

Weakness: Cost

Opportunities: New flavour for vegans, Selling the mixture in

super markets.

Threats: Many similar products with cheaper prices.

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Financing Problems
● Seed stage funding
● Early stage funding
● Later stage funding

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How did they solve their problem?

● Debt Financing in initial stages through Bank Loans

● Equity Financing in later stages through issue of IPO

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They decided to sell shares of the
company to the public and use
cash to pay off the bank loans and
to finance expansion of the
business.

The Fieldses sold stock on the London stock exchange in unlisted

securities market. The stock was offered in London in 1986. It did
not do well at first because it was not that well known in britain.
Eventually, stock price started improving. 24
The stock performed very well when it was offered in United states
in the following year.

Finally, Mrs Fields Cookies turned out to be the dollar 450

million company financed with a blend of debt and equity.

Current status: Mrs. Fields is currently owned by Z Capital

Partners, a “Chicago-based private-equity firm” and the “global
asset management firm”, Carlyle Group. The new ownership was
the result of the recapitalization of Mrs. Fields, after filing for
bankruptcy protection in 2008 25
Conclusion/Recommendation

Since now the company is not truly “Mrs. Fields” anymore, the new
executive team should try to maintain at least the core cultural
elements of the original and move forward in the spirit of Debbi
and her good partners, in order for the company to retain some of
its core values and characteristics, its essence.

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References

Jalan, Y. (2020, August 16). Unacademy Case Study - Business

Model, Fundings, Exams Offered, Etc. Aryan Jalan.
https://aryanjalan.com/unacademy-case-study/

Mariotti, Steve- The Young Entrepreneur's Guide to Starting and

Running a Business_ Turn Your Ideas into Money
Mrs. Fields Case Analysis. (n.d.). Prezi.Com.
https://prezi.com/uhu9m_a6yoo9/mrs-fields-case-analysis/
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References(Contd.)

Wazir, R. K. (n.d.). Entrepreneurial Financing: Sources, Hierarchy, and

Fundraising Process - Demonstrating the case of Unacademy Funding
Rounds. Unacademy Case Study.
https://www.academia.edu/43065672/Entrepreneurial_Financing_Source
s_Hierarchy_and_Fundraising_Process_Demonstrating_the_case_of_Un
academy_Funding_Rounds

Unacademy funding and Business Model. (n.d.). Case Study.

http://www.berojgarengineers.com/unacademy-case-study-funding
-business-model-revenue-investors-competitor/
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