UpGrad completes Unacademy acquisition for over $200 million; CEO says company ‘sold at a fraction’ of peak value

UpGrad has completed its acquisition of Unacademy for just over $200 million, bringing together two of India's better-known edtech platforms after months of discussions around the deal.

Unacademy co-founder and CEO Gaurav Munjal confirmed the completion on Tuesday, September 1, saying the company had reached a very different valuation from the one at which it raised money.

“We raised at a peak, but sold at a fraction of that,” Munjal said in a post on X. He added that he did not want to “dress these facts up”.

Unacademy had reached a valuation of around $3.44 billion in 2021, when funding for technology and edtech companies was at its peak. The latest transaction, therefore, represents a substantial reduction from that level, reflecting the broader reset in edtech valuations over the past few years.

The deal has been structured as an all-stock transaction. Earlier reports had estimated its value at around ₹1,955 crore-₹2,055 crore, or about $218 million.

The Competition Commission of India approved the transaction in July. The deal involves the acquisition of a stake in Sorting Hat Technologies, which operates Unacademy, followed by its merger with UpGrad Education.

Munjal said the decision was not taken because Unacademy was running out of money. The company has a topline of around ₹400 crore, most of its businesses are profitable or close to profitability, and it has around ₹900 crore in cash.

That gave Unacademy the option of continuing on its own, but Munjal said his conversations with UpGrad founder Ronnie Screwvala changed his view of what the combined business could build.

The combination also expands UpGrad's presence in test preparation. Unacademy operates in categories including UPSC, JEE, NEET and GATE, giving UpGrad access to a segment it did not have a major presence in earlier.

For Unacademy, the acquisition closes a six-year journey that began with its unicorn milestone. Munjal said the company may not have captured all the economic value of its original mission, but its platform helped change the online education market in India.

He highlighted the reach of Unacademy's educators, whose YouTube videos have collectively crossed 10 billion views. He also pointed to Airlearn, the language-learning business launched by Unacademy, which became one of the world's three most-downloaded language-learning apps in less than two years.

The company also completed four ESOP buybacks during its journey. Munjal said these transactions created value for employees, even though the financial outcome for founders and investors was much smaller than the company's peak valuation had suggested.

Munjal is expected to continue as Unacademy's CEO following the transaction, while existing Unacademy shareholders will receive shares in UpGrad under the all-stock arrangement.

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