By Titik Puspa 
In a significant development poised to reshape India’s competitive online education landscape, Unacademy, once a darling of the Indian edtech sector, is reportedly on the cusp of being acquired by its rival, upGrad, in an all-stock transaction. The potential merger would unite two of the nation’s most prominent digital learning platforms, creating a formidable entity in a market that has experienced seismic shifts since the pandemic boom.
The news broke on Sunday when Unacademy co-founder and CEO Gaurav Munjal shared on the social media platform X that the two companies had inked a term sheet for upGrad to acquire Unacademy in a 100% share-swap deal. Munjal indicated that the precise valuation of the transaction would remain undisclosed until the deal officially closes. This announcement arrives just over three months after Munjal himself publicly acknowledged a significant downturn in Unacademy’s valuation, stating it had fallen below $500 million. This figure represents a steep decline of approximately 85% from its pandemic-era zenith, when the company was valued at a staggering $3.5 billion in August 2021, a testament to the explosive growth experienced by edtech firms during the global health crisis.
The broader Indian edtech sector, which witnessed an unprecedented surge in demand and investment during the COVID-19 pandemic, has faced considerable headwinds as normalcy returned. With students increasingly returning to physical classrooms, the fervent demand for online test preparation and supplementary learning platforms has naturally cooled. This recalibration has forced many companies, including Unacademy, which had pursued an aggressive expansion strategy during the pandemic, to undertake significant cost-cutting measures. This has involved scaling back ambitious offline initiatives and a renewed focus on solidifying their core digital product offerings.
Ronnie Screwvala, a co-founder of upGrad, echoed the sentiment of synergy in a separate X post, confirming the agreement and elaborating on the operational implications. He revealed that Gaurav Munjal would continue to helm Unacademy post-acquisition, a move that signals a commitment to leveraging existing leadership and operational expertise. Screwvala further emphasized that the combined entity would significantly bolster upGrad’s already comprehensive integrated model, which spans a wide spectrum of educational offerings, from K-12 education and vocational upskilling to lifelong learning opportunities. To safeguard against potential disruptions, the companies have also agreed upon an undisclosed break fee, should the transaction fail to materialize.
Reflecting on Unacademy’s journey and the current market dynamics, Munjal offered a candid assessment. He acknowledged Unacademy’s role in pioneering the "modern edtech playbook" but admitted to a lapse in focus and a subsequent erosion of market share. Furthermore, he pointed to a perceived stagnation in genuine product innovation within the sector in recent years, suggesting that the acquisition could serve as a catalyst for renewed dynamism.
Founded in 2015, Unacademy rapidly ascended to prominence during the pandemic, capitalizing on the mass migration of students to online learning environments. However, the post-pandemic reality necessitated a strategic pivot. The company has since undertaken measures to streamline operations, including significant job cuts and a restructuring of various business verticals, as reported by TechCrunch in July 2024, when Unacademy laid off another 250 employees.
Despite these challenges, Munjal provided an update on Unacademy’s financial standing, stating that the company currently maintains over $100 million in cash reserves. This financial prudence has been partly attributed to the company’s efforts over the past year to consolidate its company-operated offline centers with franchise partners and a strategic refocalization on its primary online learning products. Furthermore, Unacademy recently concluded an employee stock buyback program valued at ₹500 million (approximately $5.40 million), with a notable participation rate of around 40% from former employees, indicating a commitment to valuing its past workforce.
Unacademy’s impressive fundraising trajectory, amassing approximately $854.3 million across 13 funding rounds according to PitchBook, highlights its significant investor backing. Its roster of investors reads like a who’s who of global venture capital, including prominent names such as SoftBank, Tiger Global, General Atlantic, and Peak XV Partners. This substantial financial infusion underscored the immense confidence placed in Unacademy’s potential during its growth phase.
The recent upheaval in India’s edtech sector has dramatically reshaped the competitive terrain. Byju’s, once India’s most valuable startup and a former titan of the edtech industry, has experienced a precipitous fall from grace. Its valuation has been drastically written down to a nominal amount, and the company entered insolvency proceedings in September 2024, a stark reminder of the sector’s volatility. This dramatic turn of events for Byju’s has further amplified the significance of the Unacademy-upGrad consolidation.
In contrast to the challenges faced by some of its peers, Physics Wallah, initially perceived as an underdog, has demonstrated remarkable resilience. The company has not only achieved profitability but has also continued its expansion trajectory. Physics Wallah made a robust debut in the public markets late last year, signaling a successful transition and a positive outlook for its business model, as noted by TechCrunch in November 2025. This success story offers a counterpoint to the widespread difficulties within the sector.
In recent months, Munjal has reportedly been dedicating increasing attention to Airlearn, an AI-driven language-learning application. Airlearn employs a gamified approach, mirroring the successful strategy popularized by global edtech giant Duolingo. This strategic diversion has, according to sources familiar with the matter speaking to TechCrunch, created some friction with certain Unacademy investors. These investors reportedly felt that the core edtech business was being neglected during a critical and challenging period.
Despite these internal dynamics, Munjal remains optimistic about the potential of AI in education. He highlighted that Airlearn is demonstrating promising traction in key international markets, including the United States, the United Kingdom, Germany, and Canada. He firmly believes that artificial intelligence possesses the capability to unlock a new era of innovation within the education technology domain, suggesting that this strategic focus on AI is not merely a distraction but a forward-looking investment in the future of learning.
The impending acquisition of Unacademy by upGrad, while still pending official closure, signifies a pivotal moment for both companies and the Indian edtech industry at large. It underscores the ongoing consolidation within the sector as companies adapt to a post-pandemic market reality. The combined strength of Unacademy and upGrad could indeed redefine the contours of online learning in India, potentially driving further innovation and offering a more comprehensive suite of educational solutions to students across various age groups and learning needs. The success of this merger will be closely watched as a bellwether for the future trajectory of edtech in one of the world’s largest and most dynamic education markets. The market will be keen to observe how the integration unfolds, the synergies it unlocks, and whether it can indeed usher in the next wave of innovation Munjal envisions.