MC EXCLUSIVE UpGrad and Unacademy acquisition talks fall through over valuation differences

Unacademy–upGrad acquisition talks fall through over valuation differences

• Unacademy and upGrad acquisition talks ended due to valuation disagreements
• Unacademy investors to receive minority stake in upGrad under proposed deal
• Unacademy has Rs 1,100 crore cash, refocusing on core test-prep business.

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Talks between edtech firms Unacademy and upGrad for a potential acquisition have fallen through due to valuation differences, according to sources familiar with the matter, ending months of negotiations between the two companies.

What were the Unacademy–upGrad talks about?

This comes after Moneycontrol was the first to report that upGrad, founded by Ronnie Screwvala, was in discussions to acquire Unacademy at a valuation of $300–400 million, a sharp markdown from the edtech firm’s peak valuation of $3.4 billion during the funding boom.

While there was no final clarity on valuation, Moneycontrol has learnt that, under the proposed deal, Unacademy’s investors were expected to receive a minority stake in upGrad, which was valuing itself at around $2 billion, sources said. However, the parties were unable to arrive at mutually acceptable terms, with disagreements centred on valuation expectations and deal structure.

Confirming the development to Moneycontrol, Screwvala said, “Yes, we are not proceeding basically due to valuation differences. While we cannot comment on what numbers were, it is complete to say we could not agree on valuations.”

Gaurav Munjal did not respond to queries sent by Moneycontrol.

Unacademy currently has around Rs 1,100 crore in cash on its balance sheet, and sources said the company is expected to decide its next course of action in the coming days.

What was happening at Unacademy during these discussions?

For Unacademy, the discussions with upGrad came after a series of leadership changes. Earlier this year, co-founders Gaurav Munjal and Roman Saini stepped back from operational roles at the company as part of a transition plan. Subsequently, Unacademy appointed co-founder Sumit Jain as chief executive of its core test-prep business, consolidating leadership around its largest revenue-generating vertical.

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How has Unacademy’s business changed in recent years?

Over the past two years, Unacademy has scaled back from its earlier expansion across multiple categories, narrowing its focus to core offerings as it moved to rein in costs. The company has carried out several rounds of workforce reductions since 2022 as it adjusted its operating structure to post-pandemic demand trends.

Moneycontrol has earlier reported that the proposed transaction was expected to focus largely on Unacademy’s test-prep business, rather than its non-core or experimental units, but valuation remained the key sticking point.