Ronnie Screwvala-led upGrad drops plans to acquire Unacademy: Report

upGrad has dropped plans to acquire Unacademy after months of discussions, as the two sides failed to agree on a final valuation, according to media reports.

The talks had marked the first formal confirmation of potential merger and acquisition discussions around Unacademy. Last month, co-founder Gaurav Munjal said the company was open to an M&A transaction if it resulted in a “stronger entity”. He also acknowledged that Unacademy’s valuation may have fallen to below $500 million, sharply lower than its peak valuation of $3.5 billion in 2021.

As part of the discussions with upGrad, Unacademy’s investors were expected to receive a minority stake in the combined entity. upGrad, which sees itself at a valuation of around $2 billion, was primarily interested in Unacademy’s core test-preparation business, with other verticals likely to be excluded from the deal structure.

The collapse of the talks comes against the backdrop of a prolonged slowdown in India’s edtech sector after the pandemic-driven boom. Over the past 18 months, Unacademy has been reported to be in acquisition discussions with several players, including K-12 Techno Services, Allen and upGrad.

In December 2024, Allen was reported to be in talks to acquire Unacademy for about $800 million, a development Munjal had then publicly dismissed as speculation.

The latest outcome underscores the sharp reset in edtech valuations and deal expectations. Unacademy, backed by investors such as Tiger Global, Peak XV Partners, SoftBank, WaterBridge Ventures and Meta, has been restructuring its operations and narrowing its focus as funding conditions tightened. upGrad, meanwhile, continues to pursue growth independently in a more cautious capital environment.

With the acquisition talks now off the table, both companies are expected to chart their next phase separately in a sector that remains under pressure from slowing demand, consolidation, and increased scrutiny of business models.