Title: Unacademy Merges with UpGrad: A Major Shift in India’s EdTech Landscape
In a surprising turn of events, the once-mighty Indian edtech platform, Unacademy, has been acquired by rival upGrad for approximately $206 million—an astonishing drop of about 94% from its zenith valuation in 2021. The deal, settled in an all-stock transaction, was revealed by upGrad’s co-founder and chairperson, Ronnie Screwvala, who confirmed that Unacademy shareholders will receive equity in upGrad as part of the arrangement, while early investors exited with cash.
Unacademy’s co-founder and CEO, Gaurav Munjal, took to X (formerly Twitter) to announce the closure of the deal, which took nearly six months to finalize after its initial announcement last March. Once a frontrunner backed by heavyweights like SoftBank and Tiger Global, Unacademy boasted a peak valuation of $3.44 billion two years ago. “We raised at a peak, but sold at a fraction of that,” Munjal candidly noted, highlighting the stark reality of the current edtech market.
While Unacademy still holds around ₹9 billion (approximately $94.8 million) in cash and had an annual revenue of ₹4 billion (around $42.13 million), it faced immense pressure to evolve within a rapidly changing landscape. After the surge in online learning during the pandemic faded, Unacademy had to make tough decisions, including significant cost-cutting measures and layoffs.
Founded in 2015, Unacademy aggressively expanded its operations during the peak of the pandemic, intensifying its competition with other edtech giants, particularly Byju’s. As students returned to traditional classrooms, demand for online education waned, prompting a shift in strategies for companies like Unacademy.
Despite these challenges, Munjal expressed that many of their business segments were either profitable or nearing profitability. However, leadership recognized that further growth and scale, perhaps even a public listing, would necessitate expanding beyond its current offerings. This perspective made the acquisition by upGrad, which has a solid foothold in offline education, an appealing option.
The merger also integrates Airlearn, Unacademy’s language-learning app, which will retained under upGrad’s umbrella for now. Both Munjal and Screwvala will reassess within six months whether to continue the internal development of the app or to pursue outside funding.
Screwvala recently shared his optimism on X, noting that India has the potential to showcase products with global traction. Unacademy’s diverse educational content, especially through platforms like Airlearn, is already making a mark in over 150 countries and has garnered more than 10 billion views on educational videos on YouTube.
The Unacademy brand will continue to thrive under this new partnership, with Munjal remaining in his leadership role focusing on its online divisions and strategizing for Airlearn. Importantly, the company currently employs around 1,000 individuals, and there are no immediate plans for layoffs post-acquisition.
The acquisition comes at a time when India’s edtech sector is witnessing significant shifts following a pandemic-fueled boom. Once valued at an astonishing $22 billion, Byju’s, another industry titan, has faced severe financial difficulties, reflective of the turbulent landscape.
As Unacademy embarks on this new phase under upGrad, both companies are poised to reshape the future of education technology in India and beyond, combining their strengths to better navigate the evolving demands of learners worldwide.