Education technology company upGrad, led by entrepreneur Ronnie Screwvala, has reportedly dropped plans to acquire rival edtech firm Unacademy after months of discussions failed to result in a mutually agreeable valuation.
The negotiations marked the first formal confirmation that Unacademy was exploring merger and acquisition opportunities. Last month, co-founder Gaurav Munjal had expressed openness to a potential M&A deal, provided it created a “stronger entity.” However, he also noted that Unacademy’s valuation may have fallen below $500 million, a significant drop from its $3.5 billion peak in 2021.
upGrad’s Interest
upGrad, currently valued at approximately $2 billion, was primarily interested in acquiring Unacademy’s core test-preparation business. Other verticals of Unacademy, such as K-12 offerings and niche learning services, were likely to be excluded from the deal.
As part of the proposed arrangement, Unacademy’s investors were expected to receive a minority stake in the combined entity, reflecting a shared approach to value creation. Despite these discussions, the two companies could not reconcile differences on final valuation, leading to the collapse of the deal.
Context: EdTech Slowdown in India
The failure of the acquisition comes amid a broader slowdown in India’s edtech sector following the post-pandemic boom. Over the past 18 months, Unacademy has been reported to be in acquisition talks with several other companies, including K-12 Techno Services, Allen, and upGrad.
Industry experts note that the sharp decline in valuations for many edtech startups reflects a recalibration of expectations after the rapid growth and investment surge during the pandemic. Unacademy, once one of India’s most high-profile startups, has seen its market valuation fall sharply, complicating merger and acquisition negotiations.
What’s Next
While the talks with upGrad have ended, both companies continue to operate independently, focusing on strengthening their core businesses. upGrad is expected to continue expanding its offerings in professional learning and test-prep segments, while Unacademy remains focused on rebuilding investor confidence and exploring potential partnerships or acquisitions under revised market conditions.
The collapse of the deal underscores the challenges facing the Indian edtech sector, where companies must balance growth ambitions with realistic valuations in a market that is currently recalibrating after an unprecedented boom.
