upGrad moves to acquire Unacademy in 100% share swap deal, Gaurav Munjal to continue as CEO

Edtech firm upGrad has signed a term sheet to acquire rival Unacademy in a 100% share swap deal, Unacademy co-founder and CEO Gaurav Munjal has said.

In a post on X, Munjal said the valuation of the transaction will not be disclosed until the closing of the deal when the relevant papers are filed and the transaction becomes public.

“Unacademy and upGrad have signed a term sheet for upGrad to acquire Unacademy in a 100% share swap deal,” Munjal said. “Neither side will disclose the valuation until closing, when the papers are filed and the transaction becomes public.”

Munjal said he will continue as co-founder and CEO of Unacademy and focus on building online education products for learners in India and globally.

“If & when we do come together, we share upGrad’s belief that ‘The Whole is bigger than the Sum of Parts’ and altogether we will impact students, learners and working professionals & build great Products from K12 to Forever Learning,” he said.

Confirming the development, upGrad co-founder Ronnie Screwvala said the company has signed a term sheet to acquire Unacademy in an all-stock deal, with Munjal staying on to lead the company.

“We have signed a term sheet to acquire Unacademy in an all-stock deal… They disrupted the sector once and now with AI they plan to do it again. If this closes, upGrad’s integrated model with an expanded focus from K12 to forever learning will be on a strong trajectory,” Screwvala said.

He said that the companies have also agreed to a break fee in case the transaction does not close.

The development comes months after upGrad had walked away from talks to acquire Unacademy earlier this year due to valuation differences.

In January, Screwvala had confirmed that the discussions had failed after the two sides were unable to arrive at a mutually agreeable valuation.

Unacademy, founded as a YouTube channel in 2010 and formally launched as an online learning platform in 2015, saw rapid growth during the COVID-19 pandemic as demand for online education surged.

However, the edtech firm later faced challenges as students returned to offline learning and competition intensified with lower-priced offerings.

In December last year, Munjal said the company’s valuation had dropped to below USD 500 million from its peak during the pandemic.

Unacademy’s parent Sorting Hat Technologies narrowed its standalone loss to ₹284.3 crore in the financial year ended March 2024 from ₹1,591.2 crore a year earlier.

The company’s total income slipped marginally to ₹864.3 crore in FY24 from ₹868.8 crore in FY23, while its net worth declined to ₹1,078.7 crore in FY24 from ₹1,189.17 crore in FY23.