Ronnie Screwvala-led edtech firm upGrad has dropped its plans to acquire Unacademy after months of negotiations, according to media reports. The talks ended after both sides failed to agree on valuation, highlighting ongoing stress in India’s edtech sector.
Valuation Differences End Merger Talks
The discussions marked the first confirmed instance of merger and acquisition talks involving Unacademy. However, the companies could not bridge the valuation gap, leading to the collapse of the proposed deal.
Last month, Unacademy co-founder and CEO Gaurav Munjal said the company remained open to an M&A deal if it created a stronger business. He also acknowledged that Unacademy’s valuation had likely fallen below $500 million. This marks a sharp drop from its $3.5 billion peak valuation in 2021.
Deal Structure Focused on Core Business
During the talks, Unacademy’s investors were expected to take a minority stake in the combined entity. upGrad, which reportedly values itself at around $2 billion, showed interest mainly in Unacademy’s test-preparation business.
The deal excluded several of Unacademy’s non-core verticals. This structure suggested a selective acquisition rather than a full merger.
Edtech Slowdown Shapes Strategic Decisions
The failed talks come amid a prolonged slowdown in India’s edtech market. Demand softened after the pandemic boom, forcing companies to rethink expansion and costs.
Over the past 18 months, Unacademy has explored acquisition discussions with several players. These included K-12 Techno Services, Allen Career Institute, and upGrad.
In December 2024, reports claimed Allen was in talks to acquire Unacademy for $800 million. Munjal publicly dismissed those reports as speculation.
Unacademy Narrows Focus Amid Funding Pressure
Unacademy counts Tiger Global, Peak XV Partners, SoftBank, WaterBridge Ventures, and Meta among its backers. As funding tightened, the company began restructuring its operations.
It reduced costs, narrowed its focus, and prioritised its core test-prep offerings. These moves aimed to improve efficiency and extend its runway.
upGrad Continues Independent Expansion
upGrad continues to pursue growth without acquisitions. The company focuses on higher education degrees, upskilling, and enterprise learning.
It has also expanded into international markets. This strategy has helped upGrad stay resilient in a cautious funding environment.
What This Means for India’s Edtech Ecosystem
With talks now off the table, both companies will move ahead independently. The outcome reflects a broader reset in edtech valuations and deal expectations.
For India’s edtech startups, the message is clear. Sustainable revenue and strong unit economics now matter more than scale-driven growth narratives.
