Unacademy, one of India’s biggest edtech startups, is being acquired – by another Indian edtech upstart upGrad in an all-stock deal. The purchase arrives during a period where India’s edtech space is seeing major consolidation. Founded in 2015, Unacademy grew quickly to become one of the largest online education providers in India amid the pandemic.
Even with this impressive track record, Unacademy’s valuation has experienced a stunning crash. Once worth $3.5 billion in 2021, it has since plummeted below $500 million—a staggering decline of some 85%. This overall decline mirrors the rapidly changing edtech landscape. When classrooms reopened—therefore reversing much of the immediate market demand for online learning solutions—these challenges continued through a combination of massive new demand and tightening supply.
Unacademy’s known funding rounds total about $854.3 million over 13 rounds. Its current backers include household names like SoftBank, Tiger Global, General Atlantic, and Peak XV Partners. As of last quarter, the company had more than $100 million in cash reserves, putting it in prime position to ride out this transitional era.
In recent months, Unacademy has doubled down on consolidating their operations. Post-merger, the company has restructured to align its physical centers with franchise partners and redeployed resources back towards their core online learning products. The company announced a significant corporate reorg to HQ. It introduced widespread cost savings measures and redundancies to realign its business model to shifting educational needs.
Commenting on Unacademy’s newly released IPO draft, Gaurav Munjal, co-founder and CEO called the company’s contributions to building the edtech sector. He stated, “Unacademy helped invent the modern edtech playbook,” underscoring its influence on the industry. He acknowledged past challenges: “Along the way we lost some focus and market share, and the sector itself has not seen enough real product innovation in recent years.”
Helping Unacademy’s innovation efforts is a new push to expand. It’s in the process of building Airlearn, an AI-driven language-learning app that provides a gamified learning experience which Duolingo excels at. It’s a time of significant momentum for this app, particularly in some of its most important markets such as the United States, the United Kingdom, Germany and Canada.
Munjal is confident that the upGrad merger will supercharge their common model. This new model includes K-12 education, upskilling, and lifelong learning. The two companies have executed a non-binding term sheet. Read on to see how they pulled it off, taking it in the form of an all-shares 100% share-swap deal.
Leave a Reply