Upgrad signs term sheet to acquire Unacademy in all-stock deal

BENGALURU: Edtech firm Upgrad has signed a term sheet to acquire rival Unacademy in an all-stock transaction, founders of the two companies said in separate posts on X on Saturday, marking a significant consolidation move in India’s education technology sector.

“We at Upgrad have signed a term sheet to acquire Unacademy in an all-stock deal,” Upgrad founder Ronnie Screwvala wrote. He added that Unacademy cofounder and chief executive Gaurav Munjal will continue to lead the company and focus on building online education products.

Screwvala also said the agreement includes a break fee clause if the transaction does not close, signalling that the companies have moved beyond early exploratory discussions to a more formal stage of negotiations.

Munjal separately confirmed that the companies have agreed to a 100% share-swap transaction, adding that valuation details will be disclosed only after the deal closes and regulatory filings are completed.

The development comes after earlier discussions between the two companies had stalled over valuation differences. Screwvala had earlier indicated that preliminary talks were called off after both sides were unable to agree on valuation expectations.

Reset after edtech boom

In his post, Munjal said the past year had seen significant changes at Unacademy as the company sought to refocus its operations. These included consolidating offline learning centres with franchise partners and concentrating efforts on building core online education products.

He added that the company completed a Rs 50 crore ESOP buyback, with nearly 40% of former employees participating, and that Unacademy’s global product Airlearn is gaining traction in markets including the US, UK, Germany and Canada. Munjal also said the company currently holds more than $100 million in cash reserves.

Founded in 2015, Unacademy was among the startups that expanded rapidly during the pandemic-driven edtech boom but has since narrowed its focus to its core test-preparation business. The company also went through leadership restructuring in recent months, with cofounders stepping back from operational roles and management attention consolidating around its main revenue-generating vertical.

The startup had also undertaken multiple rounds of layoffs and other cost-cutting measures as funding conditions tightened across the sector. Munjal said last year that the company had become “default alive” after significantly reducing its cash burn, while maintaining reserves of around Rs 1,200 crore.

Different paths in edtech

If completed, the transaction would bring together two companies that built scale in different segments of the education market. According to Tracxn, Unacademy has raised about $880 million in funding across multiple rounds and was last valued at around $3.5 billion in 2021. Upgrad, also founded in 2015, has raised roughly $329 million and was last valued at about $2.25 billion in 2024, the data platform shows.

Both companies have also pursued acquisition-led expansion strategies. Tracxn data shows Unacademy acquiring companies including PrepLadder, CodeChef, NeoStencil, Mastree and SwifLearn, while Upgrad has bought startups such as Harappa Education, Talentedge, KnowledgeHut, Centum Learning and Internshala as it expanded into professional skilling, higher education and career services.

Screwvala said the combined entity could build a broader learning platform spanning K-12 education, higher education and lifelong professional learning.

“They disrupted the sector once, and now with AI they plan to do it again,” he wrote, referring to Unacademy’s early role in shaping India’s online test-preparation market.

If the transaction closes, the deal would mark one of the most notable consolidation moves in India’s edtech industry since the funding slowdown that followed the pandemic-era boom.

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