India’s edtech industry is set to see one of its biggest mergers as upGrad prepares to acquire Unacademy in a deal worth Rs 1,955 crore. The acquisition will happen through an all-stock share swap, and the deal is expected to be completed by the middle of August after receiving all necessary approvals.
The merger is one of the biggest changes in India’s online education sector in recent years. It also shows how the edtech market has changed after the rapid growth seen during the pandemic. While the deal is expected to help both companies grow in the long run, Unacademy is also facing criticism from some students and former employees over recent decisions.
Unacademy’s Valuation Falls Sharply as Deal Nears Completion
Under the agreement, upGrad will acquire 100% of Unacademy through a share-swap deal. The final value of the transaction is Rs 1,955 crore, slightly lower than the earlier estimate of Rs 2,055 crore.
The deal also highlights how much Unacademy’s value has dropped over the last few years. In 2021, the company was valued at around $3.44 billion, making it one of India’s most valuable edtech startups. The current deal values the company nearly 90% lower than its peak.
The Competition Commission of India (CCI) approved the merger on July 7, 2026. Most of Unacademy’s institutional and angel investors have already signed the required agreements, and the companies are expected to complete the transaction in the coming weeks. The agreement also includes a break fee clause, which means there will be a financial penalty if the deal does not go through.
After the merger, Unacademy’s investors will get one seat on upGrad’s board. Co-founder Gaurav Munjal will continue as the CEO of Unacademy and will focus on building AI-powered education products.
AI Growth and Business Changes Are Part of the Plan
The deal also includes Airlearn, Unacademy’s AI-based language learning platform. Earlier this year, there were plans to separate Airlearn into a different company, but it will now become part of upGrad. The platform has grown quickly, with its annual recurring revenue rising from around $200,000 to nearly $3 million by the end of 2025.
upGrad is also bringing several businesses together. PrepLadder’s headquarters will move from Chandigarh to Bengaluru, where Unacademy, Airlearn, Graphy and PrepLadder will operate from the same city.
Another major change is Unacademy’s offline coaching business. The company has decided to stop running its own offline coaching centres and instead operate them through franchise partners. This decision comes after the company worked to reduce costs, as its offline centres were reportedly one of the biggest reasons for high spending.
Over the last few years, Unacademy has cut its cash burn from nearly Rs 1,400 crore in 2022 to around Rs 150–200 crore in 2024 and 2025. Although its FY25 revenue fell to Rs 826.3 crore, the lower spending helped reduce its losses. The company is also believed to have around Rs 1,100 crore in cash reserves before the merger.
At the same time, upGrad has improved its own financial performance. The company reported a provisional EBITDA profit of Rs 38.8 crore on revenue of Rs 1,531.7 crore during the first eleven months of FY26.
Student Protests and Employee Issues Continue
Even as the merger moves ahead, Unacademy is still facing complaints from both students and former employees.
Earlier this year, the company launched a Rs 50 crore ESOP buyback programme after receiving criticism over changes to its employee stock option policy. The company had reduced the time employees had to exercise their stock options, leading to backlash. It later changed its decision and introduced the buyback programme, with several employees receiving payouts ranging from more than Rs 10 lakh to over Rs 1 crore.
At the same time, Unacademy’s decision to close its company-run offline coaching centres has led to protests, especially by UPSC students at its Karol Bagh centre in Delhi.
Many students say they paid up to Rs 1.8 lakh for two-year offline coaching courses, but the company stopped classroom teaching before the course ended. According to the students, they were told to continue their studies through recorded online classes instead.
Some students also claim that the company has refused to give refunds even after earlier notices suggested that some students would be eligible. They further allege that they were asked to sign legal documents giving up future claims before any refund process could begin.
The protests became more serious after students alleged that they were locked inside a room during a sit-in protest and that bouncers, instead of senior company officials, were handling the situation. These allegations have raised fresh concerns about how the company is managing its shift away from offline education.
As upGrad gets ready to complete the acquisition, the merger could reshape India’s edtech industry. The combined company plans to focus on AI-powered learning and stronger business operations, but it will also need to address student concerns and rebuild trust as it begins its next phase of growth.