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Indian edtech startup upGrad in 100% share swap for Unacademy
upGrad, a leading edtech startup from India has signed a term sheet to acquire Unacademy in a 100% share swap. Unacademy CEO Gaurav Munjal announced on X and said the valuation would not be disclosed until the transaction closed.
In a separate post, upGrad co-founder Ronnie Screwvala said Munjal will continue to lead Unacademy and that the companies agreed on an undisclosed break fee if the deal does not close.
Munjal said Unacademy’s valuation fell below US$500 million from a 2021 peak of US$3.5 billion and that Unacademy held more than US$100 million in cash.
PitchBook data showed Unacademy raised about US$854.3 million in 13 funding rounds from backers from major global investors.
The deal comes as India’s edtech market cooled after pandemic lockdowns and after rival Byju’s entered insolvency proceedings in 2024, while others like Physics Wallah returned to profitability.
In recent months, Munjal has devoted increasing attention to Airlearn, an AI-first language-learning app that imitates the gamified approach popularized by Duolingo.
🔗 Source: TechCrunch
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Implications, context, and why it matters.
Unacademy’s move to a franchise model reopened talks with upGrad
- This renewed acquisition effort follows talks that fell apart in January over valuation 1.
- upGrad worried about the cash needed for Unacademy’s company-run offline centers. It also questioned the direction of the core test-prep business 2.
- After the split, Unacademy said it would shift physical centers to an “asset-light” franchise model, with day-to-day operations handled by local partners 3.
- Unacademy also cut test-prep costs to ₹200 crore from ₹450 crore, which reduced ongoing spend and made the business easier to sustain 3.
An all-stock deal reflects tougher terms for fallen unicorns
- Unacademy fell from a $3.5 billion valuation to what it says is now below $500 million, tracking the reset for pandemic-era startups 4.
- The founder said his focus drifted to a new AI venture, which led to investor tension as the core business weakened 4.
- The proposed all-stock transaction offers no cash payout for backers. It works as a merger that swaps their holdings into a combined entity 4.
- A restructure followed by a share-swap merger can offer a route to liquidity for overfunded tech firms that cannot raise fresh capital or go public 2.
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