upGrad signs term sheet to acquire Unacademy in all-stock deal

Edtech firm upGrad has signed a term sheet to acquire rival Unacademy in a 100% share-swap transaction, signalling a potential consolidation move in India’s struggling online education sector.

“We at upGrad have signed a term sheet to acquire Unacademy in an all-stock deal, with Founder and CEO Gaurav Munjal staying on to build Unacademy and focus on what it does best,” upGrad chairman Ronnie Screwvala said in a post on X on Sunday.

The companies have also agreed on a break fee if the deal does not close, he added.

Unacademy co-founder and chief executive Munjal also confirmed the development, saying, “Unacademy and upGrad have signed a term sheet for upGrad to acquire Unacademy in a 100% share swap deal.”

He added that neither side would disclose the valuation until the transaction closes.

The valuation under discussion in the revived talks is expected to be lower than the previously reported level of around $300-400 million for the deal, according to a person in the direct knowledge of the development.

The transaction is expected to take about two to three months to close, subject to regulatory approvals including clearance from the Competition Commission of India, the person added.

The development comes months after earlier acquisition talks between the two companies collapsed in January. In November, upGrad had proposed a share-swap deal valuing Unacademy at about $300–400 million, sharply below its $3.4 billion peak valuation in 2021.

Munjal said he would continue to lead Unacademy following the transaction. “I will be staying back as co-founder and CEO of Unacademy with the goal to build great online products for learners in India and globally,” he wrote.

Over the past year, the company has undertaken several operational changes, including consolidating company-operated offline centres with franchise partners and pivoting back to online education products. Munjal also said the firm completed a ₹50 crore Esop buyback, announced last month.

Munjal added that the company’s AI-led language learning product Airlearn is gaining traction internationally.

Earlier plans to hive off Airlearn as a separate entity have also been dropped, with the product now being developed within Unacademy and expected to operate within the broader upGrad ecosystem if the deal closes. “Our cash reserves as of today are more than $100 million,” Munjal added.

The Temasek-backed Unacademy has faced a difficult period over the past two years, with multiple sale discussions failing amid a widening gap in valuation expectations.