Upgrad Moves to Acquire Unacademy in All-Stock Deal
Edtech giant Upgrad has announced a significant move in the education technology sector by signing a term sheet to acquire rival Unacademy in an all-stock deal. This acquisition, confirmed by the founders of both companies on social media, marks a pivotal moment in India’s rapidly evolving edtech landscape. Upgrad’s founder, Ronnie Screwvala, emphasized that Unacademy’s co-founder and CEO, Gaurav Munjal, will continue to lead the company post-acquisition, focusing on enhancing online education products. The deal includes a break fee clause, indicating that the negotiations have progressed beyond initial discussions.
Details of the Acquisition
The acquisition agreement between Upgrad and Unacademy is structured as a 100% share-swap transaction, although specific valuation details will only be disclosed after the deal is finalized and regulatory requirements are met. This announcement follows a period of stalled negotiations due to disagreements over valuation. Earlier discussions had been halted as both companies struggled to align their expectations. However, the recent agreement signals a renewed commitment to collaboration and growth in the edtech sector.
Munjal highlighted that Unacademy has undergone significant transformations over the past year, focusing on consolidating its operations and enhancing its core online education offerings. The company has also successfully executed a Rs 50 crore employee stock ownership plan (ESOP) buyback, with nearly 40% of former employees participating. Furthermore, Unacademy’s global product, Airlearn, has gained traction in international markets, including the United States, United Kingdom, Germany, and Canada. Currently, Unacademy boasts over $100 million in cash reserves, positioning it well for future growth.
Shifts in the Edtech Landscape
The acquisition comes at a time when the edtech industry is recalibrating after a period of rapid expansion during the pandemic. Founded in 2015, Unacademy was one of the startups that thrived during this boom but has since narrowed its focus to its core test-preparation business. The company has experienced leadership changes, with co-founders stepping back from operational roles to concentrate on its primary revenue-generating verticals. Additionally, Unacademy has implemented multiple rounds of layoffs and cost-cutting measures in response to tightening funding conditions across the sector.
Munjal previously stated that Unacademy has become “default alive” by significantly reducing its cash burn while maintaining reserves of approximately Rs 1,200 crore. This strategic shift reflects the broader challenges faced by edtech companies as they adapt to changing market dynamics and investor expectations.
Future Prospects for the Combined Entity
If the acquisition is completed, it will unite two companies that have successfully scaled in different segments of the education market. According to data from Tracxn, Unacademy has raised around $880 million across various funding rounds and was valued at approximately $3.5 billion in 2021. In contrast, Upgrad has raised about $329 million and was valued at around $2.25 billion in 2024.
Both companies have pursued aggressive acquisition strategies to expand their offerings. Unacademy has acquired several companies, including PrepLadder and CodeChef, while Upgrad has added startups like Harappa Education and Talentedge to its portfolio. Screwvala envisions that the combined entity could create a comprehensive learning platform that encompasses K-12 education, higher education, and lifelong professional learning. He noted that both companies have the potential to disrupt the sector once again, particularly with the integration of artificial intelligence into their educational offerings. If finalized, this acquisition will represent one of the most significant consolidation moves in India’s edtech industry following the funding slowdown that occurred after the pandemic.
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