Unacademy’s sale to upGrad is the final act of India’s edtech boom

Those were the days, my friend

We thought they’d never end

We’d sing and dance forever and a day

We’d live the life we choose

We’d fight and never lose

For we were young and sure to have our way…

This song from the 1960s sums up India’s edtech sector best.

On 1 September, upGrad, Ronnie Screwvala’s upskilling and higher education company, completed its acquisition of Unacademy, the online test-prep company that was once India’s second-largest edtech startup by valuation, in an all-stock deal that closes one of the sector’s most watched consolidation stories.

The deal values Unacademy at around $200 million (around Rs 2,000 crore), less than 6% of its peak valuation of $3.4 billion in 2021. No cash changes hands. Unacademy investors will get shares in upGrad post the deal, which was cleared by the Competition Commission of India in July.

“We raised at a peak, but sold at a fraction of that. I'm not going to dress these facts up. But I am proud of what this team did between those two numbers,” Munjal wrote in a post on X. “But sometimes, you are drawn towards a path that is more exciting than the one that makes you more money…. I’m looking forward to the path ahead, and I am very sure that our shareholders will create immense value from the merger hereon.”

All core brands—including Unacademy, PrepLadder, Graphy, and language platform Airlearn—will remain distinct operating entities. Munjal will continue as CEO of the Unacademy division.

For upGrad, acquiring Unacademy gives access to the massive competitive test-prep market. It also gives the company a sizeable revenue base and cash reserve.

“This coming together is a strong message about collaboration, especially in such a high-impact, high-outcome segment like learning and looking at people’s futures,” Screwvala wrote in a post on X.

Munjal added that the company has a “topline of around 400 crores, most businesses profitable or near-profitable, and 900 crores in the bank”. 

Unacademy’s revenue from operations fell 16% to Rs702 crore in FY25 on a consolidated basis, even as the company trimmed its net loss by 31% to Rs435 crore. It has not yet reported FY26 numbers. upGrad, by contrast, ended FY25 with a 5.5% rise in revenue from operations to Rs1,569 crore, while cutting its losses by 51% to Rs274 crore.

The boom, and the bust

When Unacademy started as a YouTube channel in 2010, Munjal was still in college. He started by posting short video tutorials on programming to help fellow students. The channel gained traction over the years; Roman Saini and Hemesh Singh came on board and, in 2015, Sorting Hat Technologies was incorporated. The idea was to change the way education was imparted, hence the name un-academy.

For the first few years, it was a free platform for educators to create content that people could watch. In 2019, the company launched paid subscriptions through Unacademy Plus and pivoted to become a platform for students preparing for competitive examinations.

Its stratospheric rise came during the Covid-19 pandemic. As educational institutions went into lockdown, education moved online. Across the world, this was seen as a necessary and irreversible change. 

At the same time, the US Federal Reserve cut interest rates to near-zero, flooding the markets with cheap capital. With most industries in lockdown, that cheap capital went hunting for higher-yielding investments, and much of it flowed towards emerging markets like India and businesses that had transitioned online. Edtech fit the bill perfectly.

Then, in July 2021, Beijing nuked its own $100-billion edtech industry—barring school-curriculum start-ups from making profits, listing, or taking foreign money. The crackdown made India’s edtech market look even more attractive to global investors, adding another tailwind to an already overheated funding cycle.

Layered on top was FOMO on several fronts: VC firms that had earlier passed on edtech saw their moment of redemption, while marquee funds like Sequoia that had missed Flipkart and Ola were determined not to miss the next India story. The result was a mad rush that minted multiple edtech unicorns and drove nearly $7 billion into the sector between April 2020 and June 2022.

Unacademy became a unicorn and then multiplied its valuation within two years. It raised more than $850 million over 13 funding rounds. At one point, Munjal wanted to create a  $100 billion business. 

But then came what the industry calls “the great reopening”. As the pandemic subsided and the world reopened, students rushed back to schools and colleges, exposing the central bet of the boom—that once learners moved online, they would stay there—as flat wrong. The exodus caught the industry and investors off-guard. For example, the stock price of online education provider Chegg fell nearly 50% in one day, wiping over $4 billion off the company’s market value, in November 2021. Investment dried up, valuations plummeted, and businesses were forced to shut down. Edtech hasn’t recovered since. 

What remains after the boom

After the bankruptcy of Byju’s, once India’s largest edtech company with a valuation north of $22 billion, Unacademy’s sale for less than 6% of its peak valuation marks the end of India’s hyper-growth edtech era. A former edtech executive who has seen the rise and fall of the sector from close quarters called the deal a good move for the industry, and an important one for the ecosystem.

It cuts down the froth in the market and resets valuations closer to where they might have been without the pandemic-era excess. The industry also can’t afford another Byju’s-kind of collapse.

It is also a stark reminder that education companies can’t be run at tech valuations. Test-prep, for example, doesn’t have recurring customers like a software company. Once an aspirant clears a competitive exam, they are gone forever. Those who fail to clear eventually move on. As a result, customer acquisition costs remain significantly high. Margins are even thinner in offline coaching institutes because of higher fixed costs.

The valuation reset, therefore, isn’t just a correction in investor expectations. It is also a question for the industry: how many independent businesses can it sustain?

The Unacademy-upGrad deal is the latest step in edtech’s steady contraction in the post-pandemic world. For an industry scarred by Byju’s collapse, the deal offers a template for orderly consolidation rather than chaotic failure. It may also be the beginning of the next phase for the two companies, which are betting that together they have greater scale, a stronger portfolio and, potentially, a clearer path to a public listing.