Unacademy to be Acquired by upGrad in All-Stock Deal | Edtech News

India’s edtech landscape is undergoing a significant shift as upGrad, an online higher education platform, has signed a term sheet to acquire Unacademy, a once-leading edtech startup, in an all-stock deal. The agreement, announced on Sunday, marks a potential consolidation within the sector as companies navigate a cooling market following the surge in online learning during the pandemic.

The deal will see Unacademy operate under upGrad’s umbrella, with Unacademy co-founder and CEO Gaurav Munjal continuing to lead the company and focus on product development. While the specific valuation remains undisclosed pending the completion of the transaction and required filings, the move signals a strategic realignment for both firms. Munjal confirmed the agreement on X (formerly Twitter), stating that neither side would disclose the valuation until the deal is finalized. His post as well acknowledged a period of refocusing for Unacademy, particularly after its valuation dropped significantly from a pandemic-era peak.

A Sector in Transition

The Indian edtech sector experienced explosive growth during the COVID-19 lockdowns, fueled by the shift to remote learning. Unacademy, founded in 2015, quickly rose to prominence, becoming one of the country’s most valuable startups. Although, as schools and universities reopened, demand for online learning platforms began to wane, leading to a period of readjustment for many companies. Unacademy’s valuation, which reached $3.5 billion in 2021, plummeted to below $500 million by late 2025, reflecting the changing market dynamics.

This downturn has prompted a wave of cost-cutting measures, layoffs and strategic pivots across the industry. Unacademy itself has restructured its business, reducing its offline presence and concentrating on core digital products. The situation highlights the challenges of sustaining rapid growth in a post-pandemic environment and the necessitate for companies to adapt to evolving consumer preferences.

The All-Stock Deal and Break Fee

The acquisition will be carried out through a 100% share swap, meaning Unacademy shareholders will receive shares in upGrad in exchange for their ownership stake. This structure suggests upGrad is prioritizing long-term growth and synergy over immediate financial gains. Ronnie Screwvala, co-founder of upGrad, announced the deal on X, emphasizing Munjal’s continued leadership and the potential for combining Unacademy’s product capabilities with upGrad’s learning ecosystem. The agreement also includes a break fee, providing a financial safeguard in case the transaction fails to close.

Airlearn and the AI Focus

In recent months, Munjal has increasingly focused on Airlearn, an AI-powered language-learning application. This shift, while showing promise with early traction in markets like the US, UK, Germany, and Canada, reportedly created some friction with Unacademy investors who felt it diverted attention from the core edtech business. Munjal believes that artificial intelligence holds the key to unlocking the next wave of innovation in education technology, and Airlearn represents a significant investment in that vision. The success of Airlearn could be a key factor in the long-term value of the acquisition for upGrad.

Beyond Unacademy and upGrad: A Broader Industry Reshaping

The Unacademy-upGrad deal is just one example of the ongoing consolidation within India’s edtech sector. Byju’s, formerly the country’s most valuable startup, has faced significant financial difficulties, with its valuation effectively written down to zero and the company entering insolvency proceedings in September 2024. Meanwhile, Physics Wallah, a competitor, has emerged as a profitable and expanding player, demonstrating the potential for success in the evolving market. The company’s successful IPO late last year further underscored this trend.

Unacademy has raised approximately $854.3 million across 13 funding rounds, attracting investment from prominent firms like SoftBank, Tiger Global, and General Atlantic, according to PitchBook. The acquisition by upGrad represents a new chapter for the company and its investors.

What Comes Next: Regulatory Review and Integration

The completion of the acquisition is subject to regulatory approvals and the fulfillment of customary closing conditions. Following the closing, the focus will shift to integrating Unacademy’s operations into upGrad’s existing infrastructure. This process will likely involve streamlining product offerings, aligning marketing strategies, and optimizing resource allocation. The success of the integration will be crucial in realizing the anticipated synergies and strengthening upGrad’s position in the competitive edtech market. Munjal’s continued leadership will be instrumental in navigating this transition and ensuring a smooth integration process. The combined entity will aim to leverage its expanded reach and product portfolio to cater to a wider range of learners, from K-12 students to professionals seeking upskilling opportunities.