upGrad–Unacademy deal called off over valuation differences

The much-speculated acquisition talks between online higher education platform upGrad and test-prep major Unacademy have been called off after both parties failed to reach a consensus on valuation, according to sources aware of the matter.

Confirming the development, Ronnie Screwvala, co-founder of upGrad, told Entrackr, “Yes, we are not proceeding due to valuation differences. While we cannot comment on specific numbers, it is fair to say that we were unable to arrive at a mutually agreeable valuation.”

Entrackr had earlier reported that upGrad and Unacademy were engaged in merger and acquisition discussions as consolidation accelerates across India’s edtech sector. The talks drew attention at a time when Unacademy was navigating internal restructuring, implementing cost-rationalisation measures, and sharpening its focus on its core test-preparation business.

In recent months, Gaurav Munjal, co-founder and CEO of Unacademy, had publicly acknowledged that the company was exploring various strategic options, including fundraising and potential M&A transactions, while maintaining that no decision had been finalised. Munjal had also clarified the company’s position on employee stock option (ESOP) exercises and valuation expectations, amid questions around internal liquidity and employee compensation.

Separately, Unacademy has put on hold proposed amendments to its 2018 ESOS scheme following strong pushback from former employees. The objections were primarily linked to the tax implications and liquidity concerns associated with exercising stock options at a significantly lower valuation compared to earlier rounds.

Unacademy has yet to comment officially on the stalled merger talks.

Founded in 2015, Unacademy has raised over $800 million from investors including SoftBank, General Atlantic, and Tiger Global, and was last valued at around $3.4 billion during the peak of the edtech funding cycle. However, like several peers in the sector, the company has faced pressure to recalibrate growth expectations amid a prolonged funding slowdown.

upGrad, which operates across higher education, upskilling, and overseas education segments, has previously pursued selective acquisitions to strengthen its portfolio.