upGrad To Acquire Unacademy In Share Swap Deal

Almost three months after upGrad and Unacademy merger talks failed over a valuation mismatch, Unacademy cofounder Gaurav Munjal took to social media platform X today (Sunday, March 15) announcing that upGrad had signed a term sheet to acquire 100% stake in Unacademy. 

In his post, Munjal said that the deal is a share swap deal, without disclosing the deal size. 

As a part of the deal, Munjal will continue to remain as the CEO and cofounder of Unacademy. He added that moving forward AI will play a key role in Unacademy’s next growth. 

Ronnie Screwvala, founder of upGrad, confirmed the acquisition, which also includes Unacademy’s other verticals. “They (Unacademy) disrupted the sector once, and now with AI they plan to do it again. We are already seeing Airlearn gain global traction.” 

The fresh development has come almost a few weeks after the edtech startup announced buying back INR 50 Cr worth of ESOPs. 

The development also happened within a month after the startup announced it plans to exit its offline business by converting company operated centres into franchise partnership. This move aligned with Unacademy’s bid to move to a more capital efficient model. Unacademy currently has more than $100 Mn in cash reserves, according to Munjal. 

Unacademy’s Long Road To A Deal

Amid the slowdown in the edtech space following the pandemic led bloom, Munjal led Unacademy was reported to be in acquisition talks with multiple companies including K-12 Techno Services, Allen, upGrad among others. 

But these talks failed, largely over the high valuation being sought by Unacademy.  Founded by Munjal, Roman Saini, and Hemesh Singh in 2015, Unacademy was last valued at $3.5 Bn during its external funding round. 

The startup counts investors such as Tiger Global, Peak XV Partners, SoftBank, WaterBridge Venture, and Meta, among others, and has raised more than $830 Mn in funding. 

Most recently, Munjal acknowledged that Unacademy’s valuation is somewhere around $500 Mn a far cry from its on-paper valuation after successive funding rounds.  

For upGrad, this is the second acquisition within a month, and it is one of the most acquisitive companies in the edtech space, having acquired more than half a dozen companies since 2022.

Late last month, upGrad acquired 90% stake in internship marketplace Internshala, via share swap deal. While both companies did not disclose the deal size, it was widely reported to be around INR 100 Cr.

The company had also expressed interest in acquiring the stressed assets of erstwhile edtech giant BYJU’S, which is currently under insolvency proceedings. 

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