upGrad may soon acquire Unacademy at a $300-400 million valuation: Report

Edtech major UpGrad is reportedly in advanced talks to acquire Unacademy in a deal that could value the Bengaluru-based edtech firm at Rs 2,500-3,300 crore ($300-400 million), according to a report by Moneycontrol.

The term sheet is expected to be signed within the next three weeks, the report said.

While there is no official announcement regarding the talks, the potential valuation marks a steep decline from Unacademy’s last publicly disclosed valuation of $3.44 billion in 2021, when it raised $440 million in a Temasek-led Series H round.

As part of the proposed transaction, Unacademy’s language-learning app, AirLearn, will be spun off into a separate entity, while the core test-prep business, which includes its expanding offline learning centres, will be acquired by UpGrad. The deal structure reportedly ensures that UpGrad will hold no equity in AirLearn.

Notably, Unacademy has undertaken aggressive cost-cutting measures over the past three years, reducing its annual cash burn from over Rs 1,000 crore to around Rs 100 crore. The company currently holds about Rs 1,200 crore in cash reserves, making it an appealing target for acquisition.

The talks come months after reports that founders Gaurav Munjal and Roman Saini were preparing to step back from daily operations and spin off AirLearn as an independent venture. Following a management reshuffle in September, co-founder Sumit Jain, who joined Unacademy via the acquisition of his startup CommonFloor, was appointed CEO of the test-prep business to lead its offline expansion and profitability drive.

Founded in 2015, Unacademy rose to prominence during the pandemic-driven surge in online learning, attracting marquee investors including General Atlantic, SoftBank, and Temasek.

However, as demand for digital education moderated post-pandemic, the company shifted focus toward offline test preparation, shutting down several non-core verticals.

For FY24, Unacademy reported Rs 839 crore in revenue, a 7% decline year-on-year, while net losses narrowed 62% to Rs 631 crore, according to regulatory filings.

UpGrad, also founded in 2015 by Ronnie Screwvala, offers online degree and professional certification programmes in partnership with global universities.

Temasek is a common investor in both UpGrad and Unacademy. It led a $120 million round in UpGrad in April 2021 and invested an additional $60 million in October 2024.