India’s leading upskilling platform UpGrad has reportedly agreed to acquire test-prep startup Unacademy in an all-stock deal worth about ₹2,055 crore (~ $218 million). The deal values Unacademy about 90% lower than its peak valuation of about $3.5 billion in 2021, reports the Economic Times. Structured as a share swap rather than a cash buyout, the deal will give UpGrad access to struggling edtech firm Unacademy’s large learner base and cash reserves of around ₹900 crore.
The acquisition comes after months of negotiations between the two companies, including earlier discussions that had stalled due to disagreements over valuation. After revisiting terms in a more realistic market environment, both sides have now reached common ground. According to the report, the companies are expected to sign binding agreements over the next few days, formally locking in the structure and terms of the transaction. Even after the agreements are signed, the deal will not be immediately finalized. It remains subject to regulatory clearances, most notably from the Competition Commission of India (CCI), which reviews such transactions to ensure fair competition in the market. The report suggests that the application for CCI approval is likely to be submitted within the coming week.
Operationally, Unacademy is expected to continue functioning as a separate brand in the near term, with co-founder and CEO Gaurav Munjal likely to continue leading the company. The integration strategy appears to be complementary rather than absorptive – combining Unacademy’s strong presence in test preparation with UpGrad’s focus on higher education, professional courses, and upskilling programs. Unacademy, which has raised about $800 million to date, is estimated to have around ₹900 crore in cash reserves, which will strengthen the merged entity’s financial position.
On the other hand, UpGrad has raised around $330 million so far and was last valued at around $1.9 billion. The company is also said to be in discussions to raise an additional internal round of about ₹375 crore from existing investors, including Temasek and its co-founder Ronnie Screwvala. Temasek’s presence is particularly significant here as it is a common backer in both companies, holding around 22% in UpGrad and about 5% in Unacademy.
The acquisition also follows earlier strategic attempts by Unacademy to find a buyer. Notably, the company had been in talks with Allen Career Institute for a potential acquisition at a valuation of around $800 million. But those discussions eventually fell through due to disagreements over pricing, making the situation more critical for Unacademy as it continued to face financial challenges. The company is targeting around ₹400 crore in revenue for 2026, which would mark a further decline in its topline. In FY25, it reported operating revenue of ₹702 crore, already down about 16% year-on-year. Despite its early success and aggressive expansion across categories like test preparation, K-12, and offline centers, Unacademy struggled with high operating costs, heavy educator payouts, and significant marketing expenses. These factors, combined with slowing growth, led to sustained losses and forced multiple rounds of restructuring and layoffs.
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Ashutosh is a Senior Writer at The Tech Portal, largely reporting on new tech, and intersection of technology and business. Ashutosh’s career spans across nearly a decade of technology writing across multiple platforms and languages.
