Unacademy Reassesses Its Future: A Tale of Transformation Amidst Market Turbulence
Unacademy, once celebrated as a frontrunner in India’s vibrant edtech sector, is experiencing a dramatic devaluation, now estimated at under $500 million—an astounding 85% drop from its peak valuation of $3.5 billion during the pandemic. As the company marks its tenth anniversary, it embarks on a significant repositioning journey and is actively exploring merger and acquisition opportunities.
In a candid statement shared on X, CEO Gaurav Munjal outlined the stark contrast between Unacademy’s recent struggles and its meteoric rise just a few years ago. The pandemic had seen educational platforms thrive under lockdowns, attracting considerable investments and aggressively expanding their operations. However, with schools reopening, the momentum shifted, leading to a harsh reality for many edtech companies.
Once the crown jewel of the industry, Unacademy now finds itself in company with Byju’s—formerly India’s most valuable startup—which has seen its valuation drastically revised to almost zero amid financial turmoil and insolvency proceedings. Byju Raveendran, the company’s founder, has faced legal challenges, including hefty financial penalties for noncompliance with court orders related to substantial fund transfers.
Contrastingly, the underdog Physics Wallah has gained traction, achieving profitability and making a successful public market debut, reflecting the diverse trajectories within the edtech space.
Munjal attributed Unacademy’s decline to a combination of factors: waning demand, rising competition, and internal challenges that forced the company to retract its ambitious expansion plans. He expressed sorrow over losing market share in a sector that Unacademy had helped pioneer, describing the past few years as the most challenging for the founding team.
“Our complacency in the face of shifting dynamics contributed significantly to our downturn,” Munjal acknowledged, recognizing the need for innovation and competitive pricing in a landscape where others began to leverage Unacademy’s original strategies.
As the company reframes its strategy, Munjal has turned his attention to AirLearn, a new AI-driven language learning app inspired by the gamified approach of Duolingo. However, this pivot has caused unease among investors, with concerns that the core edtech business is being overshadowed during a critical phase of restructuring.
Founded in 2015, Unacademy has successfully raised approximately $854.3 million across 13 funding rounds, backed by significant investors including SoftBank, Tiger Global, and General Atlantic. In response to current market pressures, Unacademy has made substantial cuts, reducing its annual operating burn from ₹14 billion (around $155.7 million) to under ₹1.75 billion (approximately $19.5 million). These changes include layoffs, reduced marketing expenditures, and a renewed focus on its subscription services.
Recent reports have indicated that rival UpGrad is contemplating acquiring Unacademy for a valuation between $300 and $400 million, illustrating the intense consolidation unfolding in the edtech arena.
As Unacademy navigates this transformative phase, its adaptation strategy will be critical in determining its long-term viability and relevance in an increasingly competitive landscape.