upGrad-Unacademy Merger Talks Fall Apart On Valuation Differences

upGrad has dropped its plan to acquire Unacademy due to valuation differences, sources aware of the matter told Inc42. 

“The deal fell through as the two parties could not agree on a final valuation,” one of the sources said.

According to reports, Unacademy was seeking a valuation of around $300 Mn to $400 Mn for the acquisition. Inc42 could not independently ascertain the valuation that upGrad was willing to offer for the deal.

Unacademy and upGrad didn’t respond to Inc42’s queries on the development till the time of publishing the story. The story will be updated on receiving a response. 

This comes over a month after Unacademy cofounder and CEO Gaurav Munjal confirmed for the first time that the startup was in talks for merger and acquisition (M&A).

Amid the slowdown in the edtech sector following the pandemic-led boom, Unacademy was reported to be in acquisition talks with multiple companies like K-12 Techno Services, Allen and upGrad over the past one-and-a-half-years or so.

In December 2024, Allen was reported to be engaged in talks to acquire Unacademy for $800 Mn. Munjal, back then, denied any possibility of a sale or M&A, labelling such reports as mere rumours. 

However, the situation seems to have changed drastically since then. Speaking about the M&A last month, Munjal said the startup was willing to go through with the deal if it could lead to a “stronger entity”. 

He also said that Unacademy’s valuation had possibly plummeted to below $500 Mn, a mere 14% of its peak valuation of $3.5 Bn in 2021. 

Notably, it was reported last year that Unacademy cofounders Roman Saini and Munjal exited the startup, which counts the likes of Tiger Global, Peak XV Partners, SoftBank, WaterBridge Ventures, and Meta among its backers.

Founded in 2015 by Munjal, Saini, Hemesh Singh and Sachin Gupta, Unacademy operates an edtech platform that offers test preparation courses to students studying for various exams. The startup has raised more than $848 Mn to date.

Once the darling of VCs during the capital-fuelled pandemic era, Unacademy’s fortunes took a hit once learning centres began to reopen. Many of the acquisitions undertaken by the unicorn failed to materialise while competition from offline rivals continued to weigh on its operations. 

The company also haemorrhaged cash building an offline vertical that failed to take off. Meanwhile, the company continued to post heavy losses while revenues stayed stagnant. Unacademy reported a marginal 2.3% YoY dip in its operating revenue to INR 716 Cr in FY24, while losses declined 82.09% YoY to INR 285 Cr.