Upgrad Moves to Acquire Unacademy in All-Stock Transaction
In a landmark development for India's education technology landscape, edtech firm Upgrad has signed a term sheet to acquire its rival Unacademy through an all-stock transaction. The founders of both companies announced this significant consolidation move in separate posts on social media platform X on Saturday, signaling a major shift in the sector's dynamics.
Founders Confirm Deal Details and Leadership Plans
Upgrad founder Ronnie Screwvala publicly disclosed the agreement, stating, "We at Upgrad have signed a term sheet to acquire Unacademy in an all-stock deal." He emphasized that Unacademy's cofounder and chief executive, Gaurav Munjal, will continue to lead the company post-acquisition, focusing on building robust online education products. Screwvala also highlighted that the agreement includes a break fee clause, indicating the negotiations have progressed beyond exploratory stages to a more formal phase.
Munjal separately confirmed the 100% share-swap transaction, noting that valuation specifics will only be revealed after the deal closes and regulatory filings are completed. This development follows earlier stalled discussions between the two companies, which had previously broken down over valuation disagreements. Screwvala had earlier indicated that preliminary talks were called off due to mismatched valuation expectations.
Unacademy's Strategic Refocus and Financial Health
In his social media post, Munjal outlined the significant changes Unacademy has undergone in the past year as part of its operational refocusing efforts. The company has consolidated its offline learning centers with franchise partners and concentrated on enhancing core online education products. Additionally, Unacademy completed a Rs 50 crore ESOP buyback, with nearly 40% of former employees participating, and its global product Airlearn is gaining traction in key markets such as the US, UK, Germany, and Canada.
Munjal also revealed that Unacademy currently holds more than $100 million in cash reserves. Founded in 2015, the startup expanded rapidly during the pandemic-driven edtech boom but has since narrowed its focus to its core test-preparation business. Recent months have seen leadership restructuring, with cofounders stepping back from operational roles and management attention consolidating around main revenue-generating verticals. The company has implemented multiple rounds of layoffs and cost-cutting measures amid tightening funding conditions, with Munjal stating last year that Unacademy had become "default alive" after reducing cash burn and maintaining reserves of around Rs 1,200 crore.
Combining Strengths in the Edtech Market
If completed, this transaction will unite two companies that have built scale in different segments of the education market. According to data from Tracxn, Unacademy has raised approximately $880 million across multiple funding rounds and was last valued at around $3.5 billion in 2021. Upgrad, also founded in 2015, has raised roughly $329 million and was last valued at about $2.25 billion in 2024.
Both firms have pursued aggressive acquisition-led expansion strategies. Tracxn data shows Unacademy has acquired companies including PrepLadder, CodeChef, NeoStencil, Mastree, and SwifLearn, while Upgrad has bought startups such as Harappa Education, Talentedge, KnowledgeHut, Centum Learning, and Internshala, expanding into professional skilling, higher education, and career services.
Screwvala expressed optimism about the combined entity's potential, stating it could build a broader learning platform spanning K-12 education, higher education, and lifelong professional learning. He remarked, "They disrupted the sector once, and now with AI they plan to do it again," referencing Unacademy's early role in shaping India's online test-preparation market. If the transaction closes, this deal would represent one of the most notable consolidation moves in India's edtech industry since the funding slowdown that followed the pandemic-era boom.
