Unacademy Acquisition by UpGrad: A New Chapter in Edtech
Unacademy has finalized its acquisition by UpGrad for just over $200 million, indicating a significant 94% drop from its peak valuation of approximately $3.4 billion in 2021. Gaurav Munjal, co-founder and CEO of Unacademy, confirmed the deal’s closure in a post on Tuesday, noting that while the company had raised substantial funds at its peak, it is now being sold for considerably less.
Startup Superb had reported exclusively that UpGrad was on the verge of concluding the acquisition of Unacademy, valued at around Rs 1,955 crore. This transaction is an all-stock deal, with Munjal anticipated to continue steering Unacademy after the merger.
Financial Context of the Deal
Munjal indicated that the acquisition was not a result of financial distress. Currently, Unacademy boasts a topline of roughly Rs 400 crore, with the majority of its ventures either profitable or close to profitability. He also mentioned that the company holds about Rs 900 crore in its accounts.
Strategic Merger Decision
Munjal highlighted that Unacademy had the choice to remain independent but opted to merge with UpGrad following discussions with Screwvala. This decision was based on the belief that the synergy from the merger would enhance the educational ecosystem.
The acquisition enables UpGrad to penetrate the online test preparation market, which includes areas like UPSC, JEE, NEET, and GATE. It also expands UpGrad’s portfolio by integrating Unacademy’s educator network and other related businesses into its existing offerings in higher education, upskilling, and study-abroad services.
Broader Impact and Future Outlook
Munjal emphasized Unacademy’s wider influence, stating its educators have achieved over 10 billion views on YouTube. He also noted that the company had conducted four ESOP buybacks, providing liquidity for its employees.
Even though the exit value is significantly lower than Unacademy’s peak worth, Munjal expressed optimism that shareholders can realise considerable value from the integrated businesses moving forward.