UpGrad calls Off Unacademy acquisition over valuation and business concerns

New Delhi: Edtech platform UpGrad has officially withdrawn from a proposed acquisition of Unacademy, citing concerns around valuation and deeper business challenges at the Temasek- and SoftBank-backed company, sources familiar with the matter confirmed, as per a Newsdrum report.

The acquisition talks, which had valued Unacademy at approximately USD 290 million (about Rs 2,650 crore), fell through after UpGrad discovered structural concerns with Unacademy’s business model and flagged risks associated with its offline centre expansion.

The proposed deal would have marked a dramatic downshift from Unacademy’s peak valuation of USD 3.4 billion in 2021—a plunge of more than 90%.

“Yes, we are not proceeding due to valuation differences. While we cannot comment on specific numbers, it is fair to say that we were unable to arrive at a mutually agreeable valuation,” UpGrad co-founder Ronnie Screwvala said in a statement.

While Unacademy has not responded to media queries, a social media post by co-founder Gaurav Munjal in December 2025 had already acknowledged that the company’s valuation had dropped to one-tenth of its pandemic-era peak.

News reports quoted sources who cited red flags within Unacademy’s business, including high-profile exits and intense competition in the offline coaching segment, which would require significant capital infusion. “There were no valuation renegotiations, just mounting business challenges that made the deal unviable,” a source told BestMediaInfo.

Unacademy’s parent entity, Sorting Hat Technologies, reported standalone losses of Rs 284.3 crore in FY24, significantly down from Rs 1,591.2 crore in FY23. 

However, total income remained largely flat at Rs 864.3 crore in FY24, compared to Rs 868.8 crore the previous year. 

The company’s net worth has also eroded over the past two years, from Rs 2,285.5 crore in FY22 to Rs 1,078.7 crore in FY24.