upGrad Seeks CCI Approval for Unacademy Acquisition
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Key Highlights
Edtech firm upGrad files with CCI for approval to acquire Unacademy in a strategic move aimed at expanding market presence. Deal valued significantly lower than peak.
upGrad Seeks Regulatory Green Light for Unacademy Acquisition
Edtech major upGrad has formally initiated the process to acquire rival Unacademy by filing for regulatory approval from the Competition Commission of India (CCI). This move follows months of speculation and recent reports indicating that the deal was nearing finalization. The acquisition, structured as an all-stock transaction, is poised to significantly reshape the Indian online education landscape.
Sources indicate that the deal is being finalized at a considerably reduced valuation, reportedly around ₹2,055 crore (approximately $218 million USD). This valuation represents a substantial decrease of about 90% from Unacademy’s peak valuation of $3.4 billion during its high-growth phase in 2021. This valuation adjustment reflects the evolving market dynamics and the broader challenges faced by the edtech sector.
Strategic Rationale Behind the Merger
In its filing with the CCI, Ronnie Screwvala-led upGrad articulated the strategic imperative behind the acquisition. The company stated that this move will enable upGrad to establish a significant presence in the online test preparation segment, an area where it currently lacks direct offerings. Furthermore, the acquisition is expected to broaden upGrad’s existing portfolio of educational services, enhancing its value proposition for current users and providing a favorable outcome for Unacademy’s investors.
Unacademy is anticipated to hold a substantial cash reserve, estimated between ₹900 crore and ₹950 crore, at the time the transaction is completed. This financial position will be a key factor in the integration process and future strategic planning.
Navigating Valuation Hurdles and Market Speculation
The path to this acquisition has been marked by considerable market speculation and negotiation. Talks between upGrad and Unacademy were reportedly paused in January due to disagreements over valuation. Unacademy was initially seeking a valuation in the range of $300 million to $400 million for the acquisition. Prior to engaging with upGrad, Unacademy had also explored potential acquisition discussions with other entities, including K-12 Techno Services and PhysicsWallah, none of which materialized.
However, negotiations were rekindled, culminating in a term sheet agreement. In March, Unacademy cofounder and CEO Gaurav Munjal confirmed that upGrad had signed the term sheet, adding that he would continue to lead Unacademy post-acquisition. Screwvala commented that the deal encompasses all of Unacademy’s business verticals, expressing optimism about leveraging AI for future disruption, with their platform Airlearn already gaining global traction.
Unacademy’s Evolution and Market Challenges
Founded in 2010 by Gaurav Munjal, Hemesh Singh, and Roman Saini, Unacademy initially operated as a YouTube channel before transforming into a comprehensive online education platform by 2015. Its primary focus was on preparing students for competitive examinations such as NEET and CAT. However, the post-pandemic resurgence of offline learning presented significant challenges to its business model.
In response to market shifts, Unacademy has been implementing strategic adjustments. Munjal reported in December of the previous year that the company had significantly reduced its burn rate, from ₹1,400 crore in 2022 to less than ₹175 crore in 2025. The startup’s top line reached ₹600 crore, with projections for profitability in the subsequent year and a robust balance sheet indicating a long-term operational runway. Munjal also announced plans in January to transition Unacademy’s offline business to a franchise model by April, aiming for a more asset-light and capital-efficient operational structure while concentrating on its profitable online vertical.
Edtech Sector Outlook Amidst Consolidation
The acquisition of Unacademy by upGrad occurs against a backdrop of broader industry consolidation and a slowdown in the edtech sector. Following a period of rapid growth, the sector has faced increased scrutiny and reduced investor confidence, partly influenced by the financial challenges encountered by major players like BYJU’s. Factors such as the return to in-person schooling, a recalibration of funding for the startup ecosystem, and difficulties in technological integration have contributed to a downturn in edtech funding.
According to Inc42’s Annual Indian Startup Trends Report, 2025, funding in the edtech sector reached an eight-year low of $249 million in 2025, a 56% decrease from $572 million in 2024. Despite these headwinds, some companies, such as PhysicsWallah, have achieved significant milestones, including successful public listings. The ongoing consolidation, exemplified by the upGrad-Unacademy deal, suggests a strategic pivot towards achieving sustainable growth and market leadership in a more challenging economic environment.