The Indian edtech landscape is witnessing a major shake-up as upGrad, led by Ronnie Screwvala, has reportedly placed a bid to acquire Unacademy for around $300 million to $400 million.
Where once Unacademy was valued at about $3.44 billion, this potential deal suggests a steep valuation reset for the company.
What’s the deal?
- UpGrad is in talks to acquire the core test-prep business of Unacademy.
- The proposed valuation expectation is roughly $300-$400 million.
- As part of the deal, Unacademy’s language-learning app AirLearn might be spun off into a separate entity, and upGrad may not take equity in that part
- Talks are reportedly ongoing and a term sheet could be signed within weeks.
Why this matters
Strategic consolidation
This move by upGrad is a signal of consolidation in the Indian edtech sector. With growth having cooled post-pandemic, companies are seeking scale, diversification and synergies. The acquisition of Unacademy’s test-prep business could bolster upGrad’s footprint in K-12/competitive exams and offline/online hybrids.
Valuation correction
The potential $300-$400 million price tag marks a significant drop from Unacademy’s peak valuation of ~$3.44 billion in 2021. This underscores the broader correction happening in the edtech market.
Complementary portfolios
UpGrad has been focused on higher education, skilling and professional courses; Unacademy (especially its test-prep vertical) fills a different segment. Together, they could offer end-to-end education solutions—from K-12/test prep to upskilling.
Background: upGrad & Unacademy
- upGrad: Founded by Ronnie Screwvala and others, it’s one of India’s prominent edtech firms focused on higher education, professional certification and upskilling.
- Unacademy: Launched in 2015, it became one of India’s edtech unicorns, backed by investors including Temasek, General Atlantic, Tiger Global Management and others. At its height, Unacademy was valued at ~$3.44 billion. Moneycontrol
- The Indian edtech industry soared during Covid-19, but post-pandemic, many players face profitability pressure, user growth slowdowns and funding winter.
Key things to watch
- Term sheet and deal structure: Whether the acquisition is full buy-out, share swap, or partial. Reports suggest no cash payment, possibly equity swap.
- Spin-off of AirLearn: How Unacademy handles its non-core verticals and how these are carved out.
- Integration challenges: Merging operations, technology platforms, culture and offline/online business models.
- Impact on competition: How other edtech firms respond—whether there will be more M&A activity, consolidation or exits.
- Valuation precedent: This deal may set benchmarks for other distressed or restructuring edtech firms in India.
Risks & considerations
- Valuation risk: Paying too high a multiple in a weak sector could backfire if growth does not materialize.
- Execution risk: Combining two large organisations with different focus areas is complex.
- Market headwinds: Edtech user growth may remain muted; offline education competition remains strong.
- Regulatory/operational changes: Government policies, accreditation, offline-online blend, and monetisation remain uncertain.
Conclusion
The reported bid by upGrad to acquire Unacademy for ~$300-$400 million is a landmark event in Indian edtech. It highlights the need for scale, the tough lessons of the post-Covid era, and the shift from rapid expansion to sustainable models. For upGrad, the acquisition (if it goes through) could provide a strong complement to its existing offerings. For Unacademy, it’s a reset moment reflecting both challenge and opportunity.
