Unacademy, once one of India’s top edtech startups, is poised to be acquired by rival upGrad in an all-stock transaction. Unacademy CEO Gaurav Munjal announced the signing of a term sheet for 100% share-swap acquisition by upGrad, keeping valuation details undisclosed until closure. This announcement trails Munjal’s revelation of Unacademy’s valuation drop below $500 million from a pandemic peak of $3.5 billion in 2021.
Post-pandemic, as students pivoted back to physical classrooms, India’s edtech landscape shifted, affecting companies like Unacademy which expanded during lockdowns. These firms have since reduced costs and refocused on digital offerings. upGrad co-founder Ronnie Screwvala confirmed Munjal’s continued leadership post-acquisition, viewing this merger as a boost to upGrad’s model across various educational sectors. A break fee has been agreed upon if the deal does not finalize.
Unacademy, founded in 2015, became a significant edtech player during lockdowns but faced decreased demand with the return of in-person education, resulting in cost cuts and layoffs. Presently, the company has over $100 million in cash, having restructured offline operations alongside franchise partners. They executed an employee stock buyback involving 40% of former employees.
Unacademy has amassed $854.3 million over 13 funding rounds, with investors like SoftBank and General Atlantic. The competitive arena has altered, with Byju’s valuation dropping to zero and facing insolvency, while Physics Wallah remains profitable and expanding.
Recently, Munjal shifted focus to Airlearn, an AI-powered language app, causing friction with Unacademy investors concerned about neglecting the core business. Airlearn has gained ground across multiple global markets, with Munjal advocating for AI’s potential to drive new education tech innovations.