upGrad set to acquire Unacademy in share-swap deal as India’s edtech sector consolidates

Unacademy, once counted among India’s most valuable edtech companies, is set to be acquired by its competitor, upGrad, in an all-stock transaction that will combine two major online learning platforms in the country.

On Sunday, Unacademy co-founder and CEO Gaurav Munjal confirmed in a post on X that both companies have signed a term sheet for upGrad to acquire Unacademy via a 100% share-swap arrangement. He added that the valuation details will remain undisclosed until the deal is finalised. The announcement comes just over three months after Munjal revealed that Unacademy’s valuation had fallen below $500 million — a sharp decline of about 85% from its peak valuation of $3.5 billion during the pandemic in 2021.

India’s edtech sector, which saw rapid growth during COVID-19 lockdowns, has faced challenges in recent years as students returned to traditional classrooms and demand for online learning platforms slowed. Companies like Unacademy, which expanded aggressively during the pandemic, have since been forced to cut costs, scale back offline expansion plans, and refocus on their core digital offerings.

In a separate statement, upGrad co-founder Ronnie Screwvala said Munjal will continue to lead Unacademy following the acquisition. He also noted that the combined entity would strengthen upGrad’s broader strategy, which spans K-12 education, professional upskilling, and lifelong learning. Screwvala added that both companies have agreed to an undisclosed break fee in case the transaction does not go through.

“Unacademy helped shape the modern edtech playbook,” Munjal wrote. “Along the way, we lost some focus and market share, and the sector itself has not experienced enough meaningful product innovation in recent years.”

Founded in 2015, Unacademy rose to prominence during the pandemic as millions of students turned to online education. However, as in-person learning resumed, the company scaled back operations, laid off employees, and restructured parts of its business.

Munjal said the company now holds over $100 million in cash reserves, following a year of consolidation that included restructuring company-run offline centres into franchise partnerships and focusing more heavily on its core online learning products. He also noted that Unacademy recently completed an employee stock buyback valued at ₹500 million (approximately $5.40 million), with around 40% of former employees participating.

According to PitchBook, Unacademy has raised approximately $854.3 million across 13 funding rounds, with investors including SoftBank, Tiger Global, General Atlantic, and Peak XV Partners.

The changes reflect a broader transformation within India’s edtech landscape. Byju’s, once the country’s most valuable startup, has seen its valuation collapse to near-zero and has entered insolvency proceedings in September 2024.

At the same time, competitor Physics Wallah — once considered an underdog — has achieved profitability and continued to expand, even making a strong debut in public markets late last year.

In recent months, Munjal has increasingly focused on Airlearn, an AI-driven language-learning platform inspired by the gamified approach popularised by Duolingo. This shift has reportedly caused tension with some Unacademy investors, who were concerned that the company’s core business was being neglected during a challenging period, according to people familiar with the situation.

Despite this, Munjal said Airlearn is gaining traction in international markets, including the United States, the United Kingdom, Germany, and Canada. He also emphasised that artificial intelligence could play a key role in driving the next wave of innovation in the education technology sector.