Unacademy to be acquired by rival upGrad in all-stock deal

Unacademy is set to be acquired by rival upGrad in an all-stock, share-swap deal—an acquisition method using a stock exchange. The transaction follows a significant decline in Unacademy’s valuation, which has dropped below $500 million. According to Unacademy co-founder and CEO Gaurav Munjal, this valuation is down roughly 85% from its peak of $3.5 billion in 2021. The exact valuation of the deal will not be disclosed until the transaction closes.

The acquisition highlights a major consolidation within the edtech sector in India, which has struggled with cooling demand since the pandemic. The sector’s difficulties are starkly illustrated by the collapse of competitor Byju’s. Byju’s has seen its valuation written down to effectively zero and entered insolvency proceedings in September 2024.

On Sunday, upGrad co-founder Ronnie Screwvala stated that Munjal will continue leading Unacademy after the acquisition. Screwvala also noted that the companies have agreed to an undisclosed break fee if the deal does not close. Unacademy currently holds more than $100 million in cash reserves, according to Munjal. The company recently completed an employee stock buyback of ₹500 million (about $5.40 million), with roughly 40% of former employees participating. According to PitchBook, Unacademy has raised about $854.3 million across 13 funding rounds from backers including SoftBank, Tiger Global, General Atlantic, and Peak XV Partners.

Munjal has increasingly focused on Airlearn, an AI-first language-learning app. According to Munjal, Airlearn is gaining traction in the United States, the United Kingdom, Germany, and Canada. Reflecting on the trajectory of Unacademy, which was founded in 2015, Munjal noted that the company helped invent the modern edtech playbook. However, he acknowledged recent challenges: “Along the way we lost some focus and market share, and the sector itself has not seen enough real product innovation in recent years.”

Why it matters

The deal signals a major consolidation in India’s edtech market, which has faced cooling demand since the pandemic. It also highlights a broader pivot toward AI-driven product strategies as established players seek new avenues for growth.