India’s edtech industry is seeing one of its biggest business deals as upGrad has received approval from the Competition Commission of India (CCI) to acquire Unacademy. The deal will be completed through a 100% share-swap transaction, meaning no cash will be exchanged between the two companies.
The acquisition brings together two well-known names in the Indian education technology sector. It also comes at a time when the industry is moving away from rapid expansion and focusing more on stable growth and profitability.
With this deal, upGrad will expand beyond higher education and professional upskilling into the K-12 and competitive exam preparation segments, where Unacademy already has a strong presence. Industry experts believe this merger could become one of the biggest turning points for India’s edtech sector.
CCI Approval Clears the Way for the Deal
The Competition Commission of India has approved the merger of Unacademy’s parent company, Sorting Hat Technologies Pvt. Ltd., with upGrad Education Pvt. Ltd. This was an important step before the acquisition could move forward.
The deal values Unacademy at around ₹2,055 crore, or nearly $218 million. This is a huge drop from its peak valuation of about $3.5 billion in 2021, when online learning companies saw massive growth during the COVID-19 pandemic. Some earlier reports had estimated the deal value between $300 million and $500 million, but the final valuation will be confirmed after the transaction is completed.
The acquisition gives upGrad more than just a larger customer base. It also allows the company to enter the school education and test preparation market while gaining access to Unacademy’s reported cash reserves of nearly ₹900 crore.
At the same time, upGrad is raising around ₹375 crore through an internal funding round with support from its existing investors. This funding is expected to help the company complete the merger and support future business growth.
The deal also shows how the Indian edtech industry is changing. Instead of focusing only on fast growth, companies are now giving more importance to profitability and building sustainable businesses.
A Long Journey Before the Agreement
The merger comes after several failed attempts by Unacademy to find the right strategic partner.
In late 2024, the company was in talks with Allen Career Institute for a possible acquisition worth around $800 million. However, the discussions ended because both sides could not agree on the company’s valuation.
Earlier this year, upGrad and Unacademy also held merger talks, but those discussions did not move forward because of differences over valuation and concerns about equity dilution.
Over the last two years, Unacademy has taken several steps to reduce costs and improve its financial position. The company recently laid off around 250 employees as part of a restructuring exercise. Before that, it had already reduced nearly 12% of its workforce.
The company also changed its offline education strategy. Instead of running its own coaching centres, it shifted to a franchise-based model. This helped important exam preparation categories such as UPSC, CAT and NEET PG improve their financial performance.
Unacademy also faced criticism after changing the rules for employee stock options (ESOPs). Following complaints from former employees, the company reversed the decision and restored the earlier 30-day exercise period.
Leadership Changes Reflect the Industry’s New Direction
The merger has also brought several leadership changes at both companies.
At Unacademy, co-founder and Test Prep CEO Sumit Jain stepped down before the deal moved ahead. Co-founder Gaurav Munjal also put his plans for a new startup and the expansion of the language-learning app AirLearn on hold to focus on the merger process. While different reports have shared different views about his long-term role after the acquisition, his current priority is to ensure a smooth transition.
upGrad has also made important management changes as it prepares for the merger and its future IPO plans. The company recently appointed Mukesh Mundra as its new Chief Financial Officer after the exits of former CFO Venkatesh Tarakkad and upGrad Enterprise CEO Srikanth Iyengar.
The acquisition is being seen as another sign that India’s edtech industry has entered a new phase. During the pandemic, companies received record investments and reached very high valuations. But after demand slowed and investors started focusing more on profits, many companies had to change their business strategies.
The upGrad-Unacademy deal shows how the sector is becoming more focused on long-term growth instead of rapid expansion. As more companies look for strategic partnerships and stronger business models, this merger could become one of the most important milestones in the next chapter of India’s edtech industry.