upGrad signs term sheet to acquire Unacademy in all-stock deal

Edtech firm upGrad has signed a term sheet to acquire rival Unacademy in a 100% share swap transaction, signaling a potential consolidation move in India’s struggling online education sector.

“We at upGrad have signed a term sheet to acquire Unacademy in an all-stock transaction; Founder and CEO Gaurav Munjal will continue to build Unacademy and focus on what he does best,” upGrad president Ronnie Screwvala said in a post on X on Sunday.

The companies also agreed on an interim fee in case the deal is not completed, the official added.

Unacademy co-founder and CEO Gaurav Munjal also confirmed the development and said: “Unacademy and upGrad have signed a term sheet for upGrad to acquire Unacademy in a 100% share swap agreement.”

He added that neither party will disclose the valuation until the transaction is completed.

This development comes months after acquisition talks between the two companies collapsed in January. In November, upGrad offered Unacademy a share swap deal valuing it at around $300-400 million, well below its peak valuation of $3.4 billion in 2021.

The deal brings together two of India’s leading edtech platforms at a time when the sector is grappling with slower growth and tighter capital availability.

Munjal said he will continue to lead Unacademy following the deal. “I will be returning as co-founder and CEO of Unacademy with the goal of building great online products for students in India and around the world,” he wrote.

Over the past year, the company has implemented several operational changes, including combining company-operated offline centers with franchise partners and pivoting to online education products. Munjal also said that the company has completed a project. ₹50 crore ESOP buyback announced last month.

Munjal added that the company’s AI-led language learning product, Airlearn, is gaining traction internationally.

Earlier plans to separate Airlearn as a separate entity were also cancelled; The product is now being developed at Unacademy and is expected to operate within the broader upGrad ecosystem if the deal closes. “As of today, our cash reserves are over $100 million,” Munjal added.

Temasek-backed Unacademy has faced a difficult time in the last two years; Numerous sales calls have failed due to the widening gap in valuation expectations.