upGrad Calls Off Unacademy Acquisition as Valuation Gap Becomes Insurmountable
The Breakdown
The proposed merger between Ronnie Screwvala’s upGrad and the SoftBank-backed Unacademy has officially collapsed. The decision was confirmed by upGrad co-founder Ronnie Screwvala, who cited an inability to reach a "mutually agreeable valuation" despite several months of discussions.
The deal, which was structured as an all-stock transaction, reportedly hit a wall when the two parties could not align on their relative worth. While Unacademy was seeking a valuation in the range of $300 million to $400 million, upGrad's internal assessment—and concerns over Unacademy’s shrinking core business—made the terms unviable for upGrad’s shareholders.
From $3.4 Billion to $290 Million
The failed talks highlight a dramatic fall from grace for Unacademy. At its peak in 2021, the startup was valued at $3.4 billion. The proposed deal with upGrad would have valued the company at roughly $290 million, representing a staggering 91% erosion in value.
“While we cannot comment on specific numbers, it is fair to say that we were unable to arrive at a mutually agreeable valuation. Both sides felt it was better to stop at this stage,” said Ronnie Screwvala in a statement.
Why the Deal Collapsed
Sources close to the matter identified three primary reasons for the fallout:
Valuation Asymmetry: upGrad currently values itself at approximately $2 billion. At the proposed terms, the deal would have led to a 10–15% dilution for upGrad shareholders, which was deemed too high for the perceived value of Unacademy’s current assets.
Shrinking Core Business: upGrad reportedly identified significant challenges in Unacademy’s core test-prep business. The fierce competition in the "offline" coaching center space would have required massive capital infusions that upGrad was unwilling to commit.
High-Profile Exits & Internal Shifts: Recent months have seen a leadership transition at Unacademy, with co-founders Gaurav Munjal and Roman Saini stepping back from day-to-day operations and several high-profile executives exiting the firm.
Current Status of the Edtech Giants
upGrad: The company remains on a growth path, having narrowed its losses to ₹274 crore in FY25 (from ₹1,142 crore in FY23). It is currently preparing for an IPO in 2027 and continues to scout for other strategic acquisitions, including potential assets from the bankrupt Byju’s.
Unacademy: This is the second failed sale for Unacademy, following aborted talks with Allen Career Institute in late 2024. The company still holds a cash reserve of approximately ₹1,100 crore and will now focus on navigating its future as an independent entity.