Unacademy Exploring M&A Options for Future Growth

Unacademy is actively considering mergers and acquisitions, and if a mutually beneficial scenario arises where consolidation can foster a more robust organization, the firm will move forward with it, indicated Unacademy co-founder Gaurav Munjal in a statement on social media platform X on Wednesday, coinciding with the edtech company’s tenth anniversary since its official inception. Munjal’s comments follow reports suggesting that upGrad, a platform focusing on higher education and skill development, is negotiating to acquire Unacademy at a valuation estimated between $300 and $320 million, which reflects a nearly 90% decline from the startup’s peak valuation of roughly $3.5 billion observed during the funding surge in 2021.

Reflecting on Unacademy’s Journey

Munjal elaborated on Unacademy’s evolution, which started as a YouTube channel in 2010, created while he was in university to assist colleagues with computer science topics. The platform was officially launched in December 2015 and rapidly gained momentum by prioritizing complimentary content, fostering strong educator communities, and adopting a technology-driven approach to education.

Growth and Challenges Faced

The company experienced significant growth from 2019 to 2021 following the introduction of its subscription service, amassing nearly one million paying subscribers and securing over $700 million in various funding periods. However, Munjal noted that the post-pandemic return of learners to traditional classroom settings, heavy expenditure, and the emergence of lower-priced competitors posed challenges to the business.

Valuation Adjustments and Strategic Changes

Munjal acknowledged that Unacademy’s current valuation could be less than $500 million, compared to approximately $3.5 billion three years prior, and admitted that the pursuit of lofty valuations had led to several strategic errors. Over the past three years, Unacademy has significantly cut expenses, reducing its annual cash burn from around Rs 1,400 crore in 2022 to below Rs 175 crore in 2025, lowered pricing, and rededicated efforts toward content and subscription services. For the fiscal year 2025, the SoftBank-backed organization reported revenue of Rs 826 crore and achieved a 31% year-on-year reduction in net losses to Rs 436 crore.

While considering consolidation as a potential path, Munjal expressed that the current focus is on developing sustainable educational products with robust unit economics instead of targeting lofty valuations.