UpGrad in talks to acquire Unacademy for $300–400 million

New Delhi: Ronnie Screwvala-led edtech firm UpGrad is reportedly in discussions to acquire Unacademy in a deal valued between $300 million and $400 million, according to news reports. The potential transaction would mark one of the largest consolidation moves in India’s education technology sector this year.

The discussions are understood to be at an advanced stage, with a term sheet likely to be signed within three weeks, according to news reports citing people familiar with the matter. Both UpGrad’s Ronnie Screwvala and Unacademy’s Gaurav Munjal declined to comment on the development.

As per the news reports, the proposed deal would represent a significant drop in Unacademy’s valuation from its last publicly disclosed figure of $3.44 billion in 2021. As part of the transaction, Unacademy’s language-learning platform, AirLearn, is expected to be spun off into a separate entity, while the test-prep business, including its network of offline learning centres, would be acquired by UpGrad. The report noted that UpGrad would not hold any equity in AirLearn.

Unacademy’s financials have improved in recent years, with its cash burn reducing from more than Rs 1,000 crore annually to around Rs 100 crore. The company currently holds approximately Rs 1,200 crore in cash reserves, making it a potentially attractive acquisition target.

The talks follow a leadership transition at Unacademy. Co-founder Sumit Jain has taken charge of the test-prep division, while founders Gaurav Munjal and Roman Saini are set to lead AirLearn as an independent venture. Jain, who joined Unacademy through the acquisition of his earlier startup CommonFloor, has been focusing on expanding the company’s offline presence and improving profitability.

Founded in 2015, Unacademy rose to prominence during the pandemic, backed by investors such as General Atlantic, SoftBank, and Temasek. The company has since shifted focus from online education to offline test preparation amid cooling market demand and rising competition. For FY24, Unacademy reported revenue of Rs 839 crore, down about 7% year-on-year, while its net losses narrowed by 62% to Rs 631 crore.

For UpGrad, co-founded by Ronnie Screwvala, Mayank Kumar, and Phalgun Komandur, acquiring Unacademy’s test-prep business could expand its portfolio beyond higher education and professional learning. Unacademy’s established network of offline centres in cities like Kota and Delhi could also strengthen UpGrad’s presence in the competitive exams segment.