In a dramatic decline in India's edtech sector, upGrad is nearing the final stages of acquiring Unacademy in an all-stock deal worth about ₹2,055 crore. This represents a staggering drop of over 90% from the ₹22,000 crore ($3.44 billion) valuation that Unacademy reached at its peak in 2021. The deal, reported by Mint and sourced from people familiar with the situation, marks a significant moment for India's once-thriving edtech industry. This sector experienced a huge wave of investor excitement during the pandemic but has since faced slowing growth, increasing losses, and changing investor attitudes.
The acquisition will be a 100% all-stock transaction. This means Unacademy shareholders will get upGrad shares in exchange, with no cash involved. Sources say the deal equals about 0.12 upGrad shares for each Unacademy share held, showing the big difference in the current valuations of the two companies. upGrad's valuation is currently around ₹17,000 crore. In dollar terms, it has fallen to about $1.8 billion, mainly due to the decline of the Indian rupee against the US dollar since its peak valuation years ago
In a notable aspect of the deal, Unacademy co-founder and CEO Gaurav Munjal is expected to continue leading the company as Chief Executive Officer even after the acquisition is completed. This signals that upGrad intends to retain Unacademy's brand identity and leadership, at least in the near term, rather than immediately absorbing it into its own operations.
To put the scale of this valuation collapse in perspective, Unacademy was once celebrated as one of India's most valuable startups. It had support from major global investors like Tiger Global, SoftBank, and General Atlantic. At its peak in 2021, the Bengaluru-based company was valued at $3.44 billion, which is about ₹22,000 crore. This made it one of the standout companies in India's edtech boom. Just five years later, it is being acquired for ₹2,055 crore. This represents a loss of more than 90% of its peak value. The deal highlights how quickly fortunes can change in the startup world when growth stories confront the tough realities of unit economics and profitability.
Unacademy's decline is part of a larger trend. The Indian edtech sector, which includes companies like BYJU'S and Vedantu, has faced significant challenges since the pandemic. Schools and colleges have reopened, and competition has increased. High costs for acquiring customers and pressure from investors to become profitable pushed almost every major edtech platform to cut costs, lay off staff, and reorganize. Unacademy itself had several rounds of layoffs in 2022 and 2023. It shut down some of its divisions and stepped back from non-essential businesses. Despite these measures, the company found it hard to find a clear route to profitability at its previous scale.
For upGrad, which mostly helps people get higher education and work, buying Unacademy could mean moving into the test prep and K-12 markets that Unacademy has always served. The fact that the deal is all-stock means that upGrad isn't spending any money on the purchase, which makes it a relatively low-risk way to combine companies. If the two companies work well together, they could form one of India's biggest edtech groups, covering everything from school-level learning and preparing for competitive exams to helping working adults improve their skills and get a higher education.
The upGrad-Unacademy deal is going to be one of the most talked-about mergers in the history of Indian startups, not because of how big it is, but because of what it means. A company that was once worth $3.44 billion, was praised on stages around the world, and had the support of the world's best investors is now being bought for a small fraction of its former value.
This deal is both a warning about the risks of overvaluing and a sign that India's edtech sector is growing up, moving away from a "growth at all costs" mentality and toward business models that are both sustainable and profitable.
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