The Ronnie Screwvala-led upGrad has completed the acquisition of edtech firm Unacademy in an all-stock deal, at a valuation of just over $200 million — more than 90% below the $3.44 billion the company was worth at its peak in 2021, when it raised $440 million in a Temasek-led round.
The transaction takes Unacademy’s parent Sorting Hat Technologies into upGrad Education, giving the acquirer an entry into its core online test prep businesses across UPSC, JEE, NEET and GATE. All of Unacademy’s subsidiaries are also part of the transaction, including medical test-prep platform PrepLadder, creator platform Graphy and language-learning app Airlearn, according to sources.
The Unacademy and subsidiary brands will be retained and run separately as part of the deal rather than folded into upGrad, the formers’ co-founder and chief executive Gaurav Munjal told FE. Munjal will continue to lead Unacademy and its businesses as CEO, while co-founder Roman Saini will move into an advisory role.
Unacademy’s shareholders will get one seat on the combined entity’s board, which will be taken by Peak XV Partners managing director Shailendra Singh.
As part of the deal, which values upGrad at around Rs 18,000 crore, Unacademy’s existing shareholders will receive 10-11% of the combined entity, sources aware of the development said. A call on whether to raise external capital for Airlearn or keep it within the group is expected to be taken over the next few months, they added.
The close ends nearly 10 months of on-and-off talks between the two companies. An earlier round of talks had collapsed in January over valuation differences, with Screwvala confirming the breakdown to FE at the time. The talks resumed by March, and upGrad signed a term sheet valuing Unacademy at about Rs 2,055 crore.
By late July, as the transaction entered its final stages, the figure had been revised to around Rs 1,955 crore. upGrad was last valued at around $1.73 billion after raising about Rs 360 crore in May as part of an internal round led by Screwvala, who put in Rs 300 crore. Existing investors Temasek, International Finance Corporation and 360 ONE also participated.
The Rs 18,000 crore (~$1.9 billion) at which the swap was struck is about 10% above that mark and 16% below the company’s peak of $2.25 billion in late 2024, when Temasek put in $60 million in a Series F round.
In a post on X announcing the deal, Munjal put Unacademy’s top line at around Rs 400 crore, with most businesses profitable or near-profitable and Rs 900 crore in cash. “With a topline of around 400 crores, most businesses profitable or near-profitable, and 900 crores in the bank, we had every option to keep going independently,” he said, adding that the decision was not driven by a need for capital. “Sometimes, you are drawn towards a path that is more exciting than the one that makes you more money.”
According to Tracxn data, Unacademy’s operating revenue fell 16% year-on-year to Rs 826.2 crore in FY25, while its loss narrowed 31% to Rs 435.4 crore. Meanwhile, upGrad reported revenue of Rs 1,650 crore in FY25, up 7%, and a loss of Rs 273.7 crore, narrowed 51% from Rs 559.9 crore in FY24.
The combined entity is being built towards an eventual listing, people aware of the matter said. The merger gives it a spread across categories that neither had alone, with Unacademy concentrated in online test prep and upGrad bringing offline centres, universities, schools and upskilling. “Both companies are of the view that no single education category in India is large enough to carry a listing on its own,” one of the persons added.
Unacademy’s backers include Temasek, Nexus Venture Partners (14%), Peak XV Partners, SoftBank Vision Fund (11.8%), Tiger Global and General Atlantic, according to Tracxn. Its founders hold 9.3% between them, with an ESOP pool of 9.6%. At upGrad, prior to the deal the founder group held 29.1% and Temasek 22.2%, with an ESOP pool of 12.2%, according to Tracxn.