India’s edtech scene, once a chaotic battlefield of valuations and hypergrowth, might soon witness one of its most symbolic mergers yet. upGrad Plans to Acquire Unacademy at $300M Valuation, as it is in advanced talks to acquire the test-prep giant. That’s a far cry from its 2021 glory days when Unacademy was pegged at a dizzying $3.44 billion.
If everything stays on course, a term sheet could land within the next three weeks. Nothing official yet but insiders are already whispering that this could reshape the pecking order in India’s bruised but still-thriving edtech ecosystem.
Unacademy, headquartered in Bengaluru, has spent the last two years transforming itself slashing burn rates, shuttering loss-heavy verticals, and pouring its focus into offline test-prep centres. Its pivot seems to be paying off: the company now sits on ₹1,200 crore in cash reserves and has trimmed its yearly losses to a fraction of what they once were.
The proposed deal would reportedly peel off Unacademy’s language-learning arm, AirLearn, into a separate company, while upGrad takes charge of the core test-prep operations and its growing offline network. With Sumit Jain at the helm of that division, this merger could push upGrad deep into India’s competitive exam universe making it one of the few full-stack players spanning school, college, and career learning.
1. Background of the Acquisition Talks
1.1 Current Status
As per the latest reports, upGrad is eyeing Unacademy at a $300M valuation, and the term sheet might be finalized within weeks. Conversations are happening behind closed doors, but multiple insiders believe this move is more strategic than opportunistic. Unacademy, once the poster child of the edtech boom, has spent months quietly stabilizing its financials and it’s finally looking buyout-ready.
1.2 Decline in Valuation
The contrast couldn’t be starker. From $3.44 billion in 2021 to barely $300 million now that’s not a haircut; it’s a full buzzcut. But this isn’t unique to Unacademy. The entire edtech wave that swelled during the pandemic has deflated into a more sober, sustainability-driven market. Investors, burnt by cash-guzzling models, are now asking the hard questions profitability, unit economics, staying power. In that context, Unacademy’s fall in valuation feels less like a failure and more like a reset to reality.
2. Unacademy: Journey and Evolution
2.1 Founding and Growth
Founded in 2015 by Gaurav Munjal, Roman Saini, and Hemesh Singh, Unacademy began humbly a YouTube channel helping aspirants crack competitive exams. Fast-forward a few years, and it had morphed into a unicorn teeming with marquee investors like Temasek, SoftBank, and General Atlantic. The pandemic turbocharged its ascent, with millions of students logging in daily. But when schools reopened, the tide turned.
2.2 Pivot to Offline Test-Prep
Unacademy read the writing on the wall faster than most. It realized that India’s obsession with coaching centres, the Kota model wasn’t going away anytime soon. So, it doubled down on brick-and-mortar. By trimming experimental verticals and betting big on physical test-prep hubs in Delhi, Kota, and Bengaluru, it started reclaiming ground. The new hybrid model combining the flexibility of digital with the discipline of in-person coaching became its survival playbook.
2.3 Leadership and Restructuring
When Sumit Jain, who once co-founded CommonFloor, took charge of Unacademy’s test-prep division in September 2025, he inherited a leaner but more focused ship. His mission was clear: grow offline, cut costs, and get profitable. Meanwhile, Munjal and Saini shifted gears to focus on AirLearn, Unacademy’s spinoff targeting the language-learning market. The division of leadership wasn’t just symbolic, it reflected a company splitting itself into parts that could actually thrive independently.
2.4 Financial Health
For a company once burning over ₹1,000 crore a year, the turnaround is impressive. Annual burn now sits near ₹100 crore, revenue for FY24 came in at ₹839 crore (a small 7% dip), and losses narrowed dramatically down 62% to ₹631 crore. With ₹1,200 crore in cash reserves, Unacademy isn’t a distressed asset. It’s a cleanup success story battered but valuable.
3. upGrad: Business Model and Growth
3.1 Founding and Focus Areas
upGrad, founded by Ronnie Screwvala, Mayank Kumar, and Phalgun Komandur in 2015, has always played the long game. Unlike the fast-burn edtech startups that chased app downloads, upGrad went after credibility partnering with top universities and corporations to deliver professional degrees and certifications. Its bread and butter? Digital marketing, data science, management, and tech upskilling.
3.2 Revenue Model
Its revenue engine hums through subscription-based learning programs, certification fees, and corporate training partnerships. In recent years, upGrad has been inching toward the test-prep segment and even experimenting with offline formats. By picking up Unacademy’s test-prep business, upGrad won’t just expand its portfolio, it’ll capture an entirely new learner demographic.
3.3 Strategic Investments and Funding
Both Unacademy and upGrad share a common investor: Temasek. The Singaporean fund seems to be playing matchmaker here, having backed both companies across multiple rounds. Temasek pumped $120 million into upGrad in 2021 and followed up with another $60 million in 2024. This isn’t just financial alignment, it’s strategic chess. Temasek clearly wants its bets to reinforce each other rather than compete.
4. Details of the Acquisition
4.1 Deal Structure
As outlined, the plan involves upGrad taking over Unacademy’s test-prep operations and offline centres, while AirLearn, the language-learning app is carved out as a standalone entity. upGrad gets no equity in AirLearn, a deliberate choice to let both sides focus on their strengths rather than dilute control.
4.2 Rationale for the Deal
UpGrad Plans to Acquire Unacademy at $300M Valuation. For upGrad, this is about breadth. It’s moving from the world of professionals and working adults into the competitive exam ecosystem, essentially covering the learning journey end-to-end. For Unacademy, the deal is a chance to reset. The sale injects liquidity, sharpens focus, and removes operational drag. Investors get an exit; founders gain breathing room.
4.3 Industry Implications
This deal, if sealed, would be one of India’s biggest edtech consolidations of 2025. And it won’t be the last. Experts predict more mergers as companies scramble to balance profitability with scale. In an industry that once celebrated unicorns, the new heroes are those who can survive the winter.
5. Problems Solved by the Acquisition
5.1 For upGrad
- Expands its reach into K-12 and competitive exam learning.
- Gains offline infrastructure to complement its online empire.
- Neutralizes a major competitor by turning it into an ally.
5.2 For Unacademy
- Provides a dignified financial exit for its test-prep arm.
- Frees leadership to build AirLearn into a language-learning powerhouse.
- Keeps the brand visible across both online and offline learning spaces.
6. Competitors and Market Landscape
6.1 Direct Competitors
- Byju’s: Still massive but limping, battling debt and reputation issues.
- Vedantu: Smaller, scrappier, but holding its ground in live online classes.
6.2 Indirect Competitors
- Toppr: Focused on adaptive learning and AI-driven prep apps.
- Khan Academy India: Free, reliable, and quietly influential.
6.3 Market Trends
UpGrad Plans to Acquire Unacademy at $300M Valuation amid a changing landscape in the Indian edtech market. Valued north of $4 billion, the sector is cooling into maturity. The gold rush days are over. Now it’s about hybrid models physical centres backed by digital content and long-term viability. Investors are done funding “growth at all costs.” They want proof that learning businesses can actually, well, earn.
7. Founders’ and Investors’ Remarks
7.1 Gaurav Munjal, Co-founder Unacademy
“We’ve worked tirelessly to trim our sails and stabilize. This deal gives us the room to innovate with AirLearn while ensuring our test-prep learners continue under a strong banner.”
7.2 Sumit Jain, CEO Test-Prep Business
“We bet on offline expansion when others hesitated. Joining forces with upGrad aligns perfectly with our focus on profitability and scale.”
7.3 Ronnie Screwvala, Co-founder upGrad
“Unacademy’s test-prep network fits like a missing puzzle piece in our vision. Together, we can deliver quality education across every learning stage — online, offline, and everything in between.”
8. Financial and Strategic Impact
- upGrad gains instant access to an established offline brand.
- Unacademy sharpens focus on AirLearn and trims complexity.
- Investors enjoy liquidity and a sense of closure.
- Temasek strengthens its edtech portfolio with interlinked assets.
9. Learning for Startups and Entrepreneurs
- Strategic pivots can rescue even struggling giants.
- Obsess over cash flow, it buys you time and options.
- Leadership changes should serve clarity, not ego.
- Spin-offs aren’t retreats; they’re reinventions.
- Smart investors can act as stabilizers in turbulent markets.
About foundlanes
At foundlanes.com will keep tracking this story as it unfolds. The upGrad–Unacademy talks symbolize more than a single acquisition; they reflect how India’s edtech industry is learning to grow up. Consolidation, discipline, and sharper leadership are shaping the next era and that’s a valuable lesson for every founder still chasing the dream of scale.