New Chapter in Indian Edtech: upGrad’s Plan to Acquire Unacademy

India’s education technology industry is entering a new phase. Ronnie Screwvala’s company upGrad is in advanced talks to acquire Unacademy in a deal worth $300 million to $400 million, which equals about ₹2,500 crore to ₹3,500 crore. This move shows how much the edtech market has changed after the pandemic years.

If this deal happens, it will become one of the biggest consolidations in the Indian edtech sector. It also shows how valuations, strategies, and priorities have changed for major companies that once grew very fast during the online learning boom.

The Companies Involved

upGrad

Ronnie Screwvala co-founded upGrad in 2015 along with Mayank Kumar and Phalgun Komandur. The company offers online degrees, certification programs, and skill development courses in partnership with Indian and global universities. upGrad focuses on working professionals and graduates who want to upgrade their careers.

Investors such as Temasek have supported upGrad. Temasek invested $120 million in 2021 and $60 million in 2024. The company now operates across several education areas, from professional learning to higher education degrees.

Unacademy

Unacademy began as a YouTube channel in 2015, started by Gaurav Munjal, Roman Saini, and Hemesh Singh. The founders built it into one of India’s top competitive exam preparation platforms, offering coaching for UPSC, JEE, NEET, banking exams, and more.

In August 2021, Unacademy raised $440 million in a Series H funding round led by Temasek and reached a valuation of $3.44 billion. During the pandemic, its growth skyrocketed as millions of students turned to online classes. But when the world reopened, Unacademy’s business slowed down.

To adapt, the company expanded into offline learning centers in cities like Kota and Delhi. It also started new verticals, such as language learning, before deciding to focus again on its core test-preparation business.

What the Deal Includes

Reports say upGrad and Unacademy are in advanced negotiations. The deal values Unacademy’s core business between $300 million and $400 million. Both sides expect to sign the term sheet within three weeks.

The deal will include Unacademy’s test-preparation business and its offline learning centers. But Unacademy’s language-learning app, AirLearn, will become a separate company, and upGrad will not take any equity in that part.

Unacademy has made several financial changes before this deal. It reduced its annual cash burn from ₹1,000 crore to about ₹100 crore. It also holds ₹1,200 crore in cash reserves. For the financial year 2024, Unacademy reported ₹839 crore in revenue, which is about 7% lower than last year, and it cut net losses by 62% to ₹631 crore.

This data shows that Unacademy has focused on cutting costs and moving toward sustainability, making it a better target for acquisition.

A Big Fall in Valuation

Unacademy’s fall in valuation is dramatic. Its worth dropped from $3.44 billion in 2021 to $300–$400 million in 2025. That is about a 90% decline.

This sharp drop shows how much the edtech market has changed. During the pandemic, investors paid very high prices for online learning companies. Everyone expected online education to keep growing fast. But after schools and colleges reopened, growth slowed, and investors became more cautious.

Now, edtech companies must focus on profitability and stable growth instead of chasing high valuations. The upGrad–Unacademy deal clearly shows this new reality.

Why upGrad Wants to Buy Unacademy

1. Expanding into Test Preparation

upGrad focuses mainly on higher education and professional courses. By buying Unacademy’s test-prep business, upGrad can enter a new market — students preparing for competitive exams like JEE, NEET, and UPSC. This will give upGrad a wider student base and help it reach learners at a younger stage of their education journey.

2. Using Offline Learning Centers

Unacademy already runs offline coaching centers in several cities. upGrad can use these centers to build a hybrid learning model that mixes online and offline education. This strategy matches the current trend where students prefer both face-to-face and digital classes.

3. Getting a Strong Brand and Teachers

Unacademy has a strong brand in exam preparation and a large pool of expert teachers. upGrad can combine this strength with its own online university and degree programs to create a full learning ecosystem — from school-level exams to advanced degrees and job skills.

4. Reducing Cost and Building Scale

Since Unacademy already reduced its costs and has ₹1,200 crore in reserves, upGrad can integrate it without worrying about high losses. The combined business can achieve economies of scale, meaning both can grow faster together than separately.

5. Strengthening Market Position

India’s edtech space has many players, and competition is intense. This acquisition will make upGrad a much larger and more powerful company, giving it a better chance to compete with other education giants and coaching networks.

Unacademy’s Transformation Story

Unacademy grew quickly between 2018 and 2021. The company raised money several times, hired thousands of employees, and expanded into new verticals. But after the pandemic boom ended, growth slowed, and Unacademy began to change direction.

It opened offline coaching centers to reach students who wanted physical classrooms. It closed some non-core businesses and cut unnecessary expenses. It also brought Sumit Jain, the founder of CommonFloor, to lead the test-prep division as CEO in September 2025.

The founders — Gaurav Munjal, Roman Saini, and Hemesh Singh — took a step back from daily operations. They shifted focus to building AirLearn, their language-learning app, which will remain outside the upGrad deal.

These changes helped Unacademy improve efficiency and reduce losses. The company moved from a high-spending growth model to a more focused, cost-conscious approach. This shift prepared it for acquisition.

Challenges for Both Companies

Even though the deal looks promising, both companies face real challenges.

For upGrad

upGrad must manage integration carefully. It will merge two very different cultures — one focused on higher education and another focused on test preparation. Managing teachers, staff, and technology systems will take time and planning.

The company must also control costs. Offline centers have higher expenses because of rent, electricity, staff salaries, and local operations. If upGrad does not manage them well, profits may fall.

upGrad also risks losing focus. The company’s main strength lies in professional and higher education. Expanding too fast into new areas like test-prep could stretch its management and resources.

For Unacademy

Unacademy’s team will face changes in leadership, structure, and operations. The brand may also lose some independence once it becomes part of upGrad. Investors will also have to accept a much lower valuation than before, which may reduce their returns.

For the Market

The education market in India remains unpredictable. If the overall demand for online learning stays weak, or if regulations become stricter, the merged company may struggle to meet its goals.

What This Means for India’s Edtech Sector

1. Realistic Valuations

The steep drop in Unacademy’s valuation shows that investors now value companies based on real performance, not hype. Profitability and sustainable growth matter more than user numbers.

2. More Mergers and Acquisitions

This deal may inspire other companies to merge or sell parts of their business. As growth slows, many startups will look for strong partners to survive or scale.

3. Focus on Hybrid Learning

Both upGrad and Unacademy see the importance of offline learning. The future of education in India will likely combine online courses with physical coaching centers. Students want flexibility but also personal guidance.

4. New Investor Expectations

Investors will now ask edtech companies to show clear financial discipline. They want proof that the business can earn money, not just attract users.

5. Impact on Jobs and Talent

When large companies merge, employees often worry about job security. Both companies must handle this transition carefully to keep talented teachers, content creators, and managers motivated.

The Next Steps

The first step will be signing the term sheet within the next few weeks. After that, both companies will start due diligence, which means checking each other’s finances, assets, and contracts in detail.

Then they will finalize how to move staff, merge systems, and manage the carve-out of AirLearn. AirLearn will operate separately under Unacademy’s founders.

Once the legal process finishes, upGrad will announce how it will integrate Unacademy’s test-prep business. It will also reveal the leadership structure, the number of offline centers it plans to keep, and how it will rebrand the courses.

Investors and analysts will closely watch how this integration goes. The success of this deal will depend on how smoothly upGrad brings Unacademy into its system and how quickly it can turn the test-prep segment profitable.

Understanding the Numbers

Let’s look at the key financial details again in simple form:

This table shows that Unacademy reduced losses and improved cash control. Those improvements make it more attractive for upGrad to buy.

What upGrad Must Do After the Deal

If upGrad completes the acquisition, it will need to focus on a few critical goals:

1. Smooth Integration

upGrad must bring Unacademy’s systems, courses, and offline centers under one operational plan. The company must unify technology platforms, content, and customer support.

2. Keep Teachers and Staff Happy

Unacademy’s teachers and managers form the backbone of its success. upGrad must keep them motivated and involved. It must offer career growth and a clear role within the larger organization.

3. Build a Strong Learning Path

upGrad can connect Unacademy’s students to its other courses. A student who prepares for JEE or NEET with Unacademy can later enroll in a professional or degree course with upGrad. This approach creates a complete learning journey from school to career.

4. Increase Profitability

upGrad must make the test-prep business profitable quickly. It should manage offline centers efficiently, attract new students, and maintain the quality of courses.

5. Clear Brand Communication

After the acquisition, upGrad must clearly explain what the combined brand stands for. Students should understand that upGrad now offers learning options for every stage — from exam preparation to advanced degrees and job skills.

6. Manage Offline Risks

Running physical coaching centers brings different risks — such as high rent, maintenance costs, and competition in local markets. upGrad must handle these carefully to avoid financial pressure.

The Wider Impact

For Students

Learners will benefit from better technology, improved content, and combined resources. They will get more flexible choices — studying online, in person, or in blended formats.

For Investors

Investors will treat this deal as a signal of where the Indian edtech market stands. The transaction shows that exit values have corrected and that future investments will depend on strong business fundamentals.

For Competitors

Rivals in the education market will need to rethink their strategies. They may start exploring their own mergers or partnerships to stay competitive.

For the Education System

This deal strengthens the shift toward hybrid learning in India. The days of purely online education dominance have ended. The new era focuses on combining classroom experience with digital tools to give students the best results.

For Policymakers

Large transactions in the education space often attract attention from regulators. Authorities may set new rules for online and offline education, especially to protect students and ensure quality standards.

Possible Outcomes

Scenario 1: Successful Integration

upGrad completes the acquisition smoothly, merges operations, and builds a powerful hybrid learning company. The combined entity grows revenue and reaches new students in smaller cities.

Scenario 2: Slow Progress

Integration takes longer, and upGrad struggles to manage offline operations. Growth continues but at a slower pace.

Scenario 3: Market Pressure

If the education market weakens further or offline costs rise, upGrad may find it hard to earn returns quickly. This outcome could force another round of restructuring.

Key Takeaways

• The deal value stands at $300–$400 million (₹2,500–₹3,500 crore).
• Unacademy’s valuation dropped nearly 90% from its 2021 peak of $3.44 billion.
• Unacademy reduced losses and improved efficiency before entering talks.
• upGrad wants to combine professional learning with test preparation and offline centers.
• The deal shows a clear shift from high growth to sustainable profitability in Indian edtech.
• Integration and execution will decide whether this deal creates value or faces challenges.

Conclusion

The possible acquisition of Unacademy by upGrad shows how India’s edtech industry has matured. Companies that once chased high valuations now focus on real earnings, operational efficiency, and hybrid learning.

If upGrad completes the deal successfully, it will become one of India’s most comprehensive education platforms — guiding learners from school-level preparation to professional upskilling.

For Unacademy, this transaction represents a new beginning. After years of rapid growth and high spending, the company now focuses on sustainability and specialization.

For India’s education ecosystem, this deal marks a turning point. The future of learning in the country lies in balance — between online convenience and offline depth, between scale and sustainability, and between technology and human teaching.

This merger shows that Indian edtech is not slowing down — it is growing up.

Also Read – Top 10 Startup CEO Mistakes That Can Ruin a Business