India’s edtech landscape is gearing up for one of its most significant consolidation moves yet. According to a report by Moneycontrol, edtech major UpGrad is in advanced discussions to acquire Unacademy in a deal valued between $300 million and $400 million (₹2,800–3,500 crore).

If finalized, the acquisition would mark a watershed moment in the country’s online education sector — once the crown jewel of India’s startup ecosystem during the pandemic boom, now recalibrating amid a changed market reality.

Talks Progressing Toward a Term Sheet

Sources close to the matter revealed that the two companies could sign a term sheet within the next three weeks, though discussions remain private. Representatives for Ronnie Screwvala-led UpGrad and Gaurav Munjal’s Unacademy have not yet commented publicly.

The deal’s potential valuation underscores the steep correction in Unacademy’s worth — from a $3.44 billion valuation in 2021 to a fraction of that today — reflecting how dramatically the edtech sector’s fortunes have shifted post-pandemic.

AirLearn to Spin Off as a Separate Entity

As part of the proposed deal structure, Unacademy’s language-learning platform, AirLearn, will be spun out into an independent company.

“The core test-preparation business — including Unacademy’s rapidly growing offline learning centres — will be acquired by UpGrad,” one source confirmed. Importantly, UpGrad will hold no equity stake in AirLearn, keeping the language-learning venture independent from the main transaction.

This move allows Unacademy’s leadership to preserve a part of their innovation-driven portfolio while focusing on creating stability in their core test-prep vertical.

From Cash Burn to Cash Reserves: A Financial Turnaround

Unacademy’s financial profile has changed dramatically over the past three years. At its peak, the company was burning over ₹1,000 crore annually. Today, that figure has been slashed to around ₹100 crore per year, according to people familiar with the company’s finances.

The company also boasts a robust ₹1,200 crore in cash reserves, positioning it as a relatively stable and attractive acquisition target in a sector where many startups are still struggling to find profitability.

This transformation aligns with broader trends across India’s edtech industry, where companies have tightened costs, shifted to hybrid learning models, and prioritized profitability over rapid growth.

The Founders’ Transition and Strategic Realignment

Interestingly, the acquisition talks follow months of internal restructuring at Unacademy. Earlier this year, reports indicated that founders Gaurav Munjal and Roman Saini were planning to step back from daily operations and transition leadership to a more operationally focused team.

Back in May 2025, Moneycontrol reported that the board had advised the founders to first stabilize finances and reduce burn before implementing leadership changes. That transition has now materialized:

In September 2025, Sumit Jain, co-founder of the real-estate platform CommonFloor (acquired by Unacademy in 2020), was appointed CEO of Unacademy’s test-prep division. Jain has since been spearheading the company’s offline expansion and profitability push, formalizing the startup’s shift toward a leaner, hybrid education model.

Unacademy’s Pandemic Rise — and What Came After

Founded in 2015 by Gaurav Munjal, Roman Saini, and Hemesh Singh, Unacademy started as a humble YouTube channel before growing into one of India’s largest online learning platforms.

During the COVID-19 pandemic, the Bengaluru-based company became synonymous with online test preparation, offering live and recorded classes for competitive exams such as UPSC, JEE, NEET, CAT, and various government banking exams.

Its success attracted a roster of top global investors, including SoftBank, General Atlantic, Temasek, and Sequoia Capital. In 2021, Temasek led Unacademy’s $440 million Series H round, valuing the company at a staggering $3.44 billion.

However, as the edtech bubble began to cool, Unacademy was forced to reassess its business model. The company shut down non-core verticals, trimmed its workforce, and pivoted to offline coaching through its “Unacademy Centres” in cities like Kota, Delhi, and Pune.

The strategy seems to be paying off. For FY24, Unacademy reported ₹839 crore in revenue, down 7% year-on-year, but significantly reduced net losses by 62% to ₹631 crore, according to regulatory filings. This steady path toward operational efficiency has made it a more viable acquisition target.

UpGrad’s Strategic Bet on Consolidation

For UpGrad, the proposed Unacademy deal would be one of its largest acquisitions to date, further cementing its position as a dominant force in India’s edtech consolidation wave.

Founded in 2015 by Ronnie Screwvala, Mayank Kumar, and Phalgun Komandur, Mumbai-headquartered UpGrad specializes in higher education, professional learning, and career upskilling. The platform partners with top global universities to offer online degrees, MBA programs, and certifications in data science, business, technology, and management — primarily catering to working professionals and college graduates.

With key investors such as Temasek, IIFL, and the International Finance Corporation (IFC), UpGrad has steadily built one of India’s most trusted edtech brands in the higher-learning space.

The acquisition of Unacademy could provide UpGrad with an entry point into India’s vast test-preparation market, which continues to attract millions of aspirants annually. By integrating Unacademy’s strong offline network and competitive exam expertise, UpGrad could build a comprehensive learner ecosystem — from school and college prep to executive education.

Temasek: The Common Investor Connecting Both Giants

A key thread running through this story is Temasek, Singapore’s sovereign investment firm, which has significant stakes in both Unacademy and UpGrad.

Temasek led Unacademy’s $440 million round in 2021 and remains a major shareholder. It has also invested $120 million in UpGrad in 2021 and an additional $60 million in 2024. This dual involvement may help smoothen negotiations and align strategic interests between the two edtech companies.

Given Temasek’s long-term outlook and presence in both cap tables, its support could be instrumental in finalizing the acquisition and steering integration post-merger.

India’s Edtech Evolution: From Boom to Balance

The potential UpGrad–Unacademy merger also reflects a broader reset within India’s edtech sector. Once one of the most exuberant startup categories during the pandemic, edtech saw massive valuations, aggressive expansion, and a flood of investor capital.

However, as offline schools reopened and funding dried up, the market faced a reality check. Several players — including Byju’s, Vedantu, and PhysicsWallah — have had to restructure operations, seek new revenue streams, or explore mergers to survive.

Against this backdrop, UpGrad’s acquisition of Unacademy would not only signal strategic consolidation but also a maturing phase for India’s education technology industry, where sustainable growth, profitability, and synergy take precedence over hyper-growth.

The Road Ahead: What This Deal Could Mean

If the acquisition goes through, UpGrad would acquire Unacademy’s entire test-prep business, including its offline learning centres, teaching infrastructure, and brand assets — creating a hybrid powerhouse in the Indian education ecosystem.

For Unacademy, this would mark the culmination of a decade-long journey from a YouTube startup to an edtech unicorn, and now, a potential acquisition success story amid a turbulent sector. Its founders’ pivot toward AirLearn, the standalone language-learning venture, may allow them to refocus on innovation-driven, scalable education technology beyond India’s test-prep market.

For UpGrad, this move could significantly broaden its learner funnel — from school and college aspirants to professionals and executives — making it India’s first truly end-to-end lifelong learning platform.

Key Facts at a Glance

Bottom Line

If sealed, the UpGrad–Unacademy acquisition would mark a historic consolidation in India’s edtech landscape — merging two of the country’s most recognizable learning platforms.

It’s not just a financial transaction but a symbol of the sector’s evolution — from the pandemic-era frenzy to a more measured pursuit of sustainability, synergy, and long-term value creation.

With deep-pocketed investors like Temasek bridging both sides, and a clear strategic rationale, the stage seems set for a new chapter in India’s digital education story.

With inputs from agencies

Image Source: Multiple agencies

© Copyright 2025. All Rights Reserved. Powered by Vygr Media.