Unacademy acquired by upGrad for just over $200 million; Munjal says ‘we raised at a peak, but sold at a fraction’

Unacademy has completed its acquisition by Ronnie Screwvala-led upGrad for just over $200 million, marking the end of a months-long transaction between two of India’s major edtech companies. Unacademy co-founder and CEO Gaurav Munjal confirmed the closure in a post on X on Tuesday.

“Six years ago today, Unacademy became a unicorn. Today, Unacademy has closed its acquisition by UpGrad for just over $200M. We raised at a peak, but sold at a fraction of that. I’m not going to dress these facts up,” Munjal said.

The Competition Commission of India (CCI) had cleared the transaction on July 7, according to its notification. The regulator approved the acquisition of certain shareholding in Sorting Hat Technologies Pvt Ltd, the legal entity that operates Unacademy, and its subsequent merger with and into upGrad Education Pvt Ltd. The CCI said the detailed order would follow. 

The transaction is a 100% share-swap deal. Earlier reports put its value at around ₹1,955 crore to ₹2,055 crore, or roughly $218 million. The deal represents a sharp fall from Unacademy’s peak valuation of about $3.44 billion in 2021. 

Why Unacademy chose upGrad

Munjal said the decision to sell was not driven by a shortage of cash. He said Unacademy currently has a topline of around ₹400 crore, with most of its businesses profitable or near-profitable, and ₹900 crore in the bank.

“With a topline of around 400 crores, most businesses profitable or near-profitable, and 900 crores in the bank, we had every option to keep going independently. Nobody was forcing this,” he said.

Munjal said his interactions with Screwvala and his understanding of what upGrad had built in higher education eventually convinced him that a combination would be better for the wider education ecosystem.

“Sometimes, you are drawn towards a path that is more exciting than the one that makes you more money,” he said.

The deal also gives upGrad an entry into online test preparation, including categories such as UPSC, JEE, NEET and GATE, where it previously did not have a presence. The transaction had been structured as an acquisition of shareholding in Sorting Hat Technologies followed by its merger with upGrad Education. 

From unicorn to acquisition

Looking back at Unacademy’s journey, Munjal said the company did not capture all the economic value of its original mission to democratise education, but changed the way online education was built in India.

“When Roman Saini and I started Unacademy with Hemez and Sumit Jain, the mission was to democratise education,” he said. “We didn’t end up capturing all the economic value of that mission. But we changed what online education looks like in this country.”

He highlighted Unacademy’s free platform, which helped create a generation of celebrity educators. Their YouTube videos, he said, have crossed 10 billion views.

Munjal also pointed to Airlearn, the language-learning business launched by Unacademy, saying it became one of the top three most-downloaded language-learning apps globally in less than two years.

“We always wanted to build a global consumer product out of India. We did,” he said. Munjal also thanked employees, educators, investors and his co-founders, while highlighting Unacademy’s four ESOP buybacks.

“We did four ESOP buybacks that created real value for our employees, even though the founders and investors didn’t create much for themselves in the process,” he said.

Munjal is expected to continue as CEO of Unacademy following the transaction, while Unacademy shareholders will receive shares in upGrad as part of the all-stock combination.