upGrad Completes Unacademy Acquisition for Over $200 Million
UpGrad, led by Ronnie Screwvala, has finalized its purchase of the edtech firm Unacademy for slightly more than $200 million, indicating a significant decline from Unacademy’s highest valuation of $3.44 billion.
Unacademy co-founder and CEO Gaurav Munjal verified the conclusion of the deal in a post on X on September 1. He stated that the agreement concludes months of intermittent discussions between the two firms.
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The acquisition provides upGrad access to the online test-preparation sector, incorporating Unacademy's resources for UPSC, JEE, NEET, and GATE into its current range of higher education, professional development, study abroad, and certification services.
Unacademy achieved unicorn status six years back and grew quickly during the pandemic-driven edtech surge. Its highest valuation was $3.44 billion. The company then reduced its operations and redirected its efforts towards creating a more sustainable business.
The negotiations underwent multiple rounds and were paused at one stage due to disagreements on valuation before ultimately continuing. In March, the firms finalized a term sheet for a fully-stock deal, with Munjal expected to remain as Unacademy's CEO. In July, the Competition Commission of India sanctioned the proposed merger, removing the regulatory obstacle for the agreement.
The purchase occurs when Unacademy states its financial condition has significantly enhanced since the challenging times after the edtech surge. Munjal stated that the firm currently boasts a revenue of approximately Rs 400 crore, with the majority of its operations being either profitable or close to breaking even. He also mentioned that Unacademy held approximately Rs 900 crore in its accounts.
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That, as per Munjal, indicated the company could have persisted on its own instead of selling since it required funding.
He stated that the choice to merge with upGrad was primarily influenced by the opportunities within the broader education ecosystem instead of financial strain. The acquisition extends upGrad’s reach from higher education, certification, study abroad, and professional upskilling to include online exam preparation.
Unacademy's primary test-preparation services offer courses for competitive tests like UPSC, JEE, NEET, and GATE. In its submission to the Competition Commission of India, upGrad stated that the deal would enable it to enter the online test-preparation sector, which it did not have access to before.
The agreement thus unites two companies with distinct yet complementary roles in India's education sector, as Unacademy contributes its test-preparation services to upGrad's current educational offerings.
The purchase also comes after a Rs 360-crore internal funding round at upGrad. As per the report, Ronnie Screwvala invested Rs 300 crore in that round, with participation from Temasek, IFC, and 360 One as well. For Munjal, finalizing the acquisition signifies the conclusion of a six-year journey that started when Unacademy reached unicorn status.
In his post, he expressed pride in what the team created, even with the gap between the company's fundraising valuation and its final acquisition value. He highlighted Unacademy's free platform and its contribution to producing a generation of renowned educators. Munjal reports that the videos created by educators on the platform exceeded 10 billion views.
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He also emphasized Airlearn, Unacademy's language-learning tool, noting it became one of the top three most-downloaded language-learning apps globally in under two years. Munjal stated that Unacademy has accomplished four ESOP buybacks, which he viewed as generating value for employees while founders and investors did not produce equivalent value for themselves. He mentioned that he is now eager for the next phase under the upGrad umbrella and is confident that shareholders will gain substantial value from the merger.