Explainer: Why the upGrad–Unacademy deal collapsed
Acquisition talks came to nought over valuation differences
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Prefer us on GoogleLast Updated: Jan 09, 2026, 17:14 IST3 min
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The collapse of acquisition talks between upGrad and Unacademy has brought into focus the challenges facing consolidation in India’s edtech sector, which is still grappling with a slowdown after the pandemic-fuelled boom.
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Higher education and upskilling platform upGrad, founded by Ronnie Screwvala, had been in discussions for several months to acquire SoftBank-backed Unacademy in an all-stock transaction. The deal was expected to value Unacademy at around $300–400 million, according to multiple media reports.
This would have been one of the most significant consolidation moves in Indian edtech, combining UpGrad’s presence in higher education, study abroad and upskilling with Unacademy’s scale in online test preparation. Under the proposed structure, Unacademy’s investors were expected to receive a minority stake in upGrad, which was valuing itself at around $2–2.25 billion.
"Yes, we are not proceeding due to valuation differences. While we cannot comment on specific numbers, it is fair to say that we were unable to arrive at a mutually agreeable valuation,” Screwvala, co-founder, upGrad, said in a statement.
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Unacademy was being discussed at a valuation that implied a nearly 90 percent drop from its peak valuation of $3.4 billion in 2021, when the edtech funding boom was at its height. While this markdown reflects the broader reset in the sector, sources said the two sides could not align on what constituted a fair price, given Unacademy’s current business outlook.
From upGrad’s perspective, people familiar with the matter reportedly said there were concerns around the trajectory of Unacademy’s core test-preparation business, which has faced slower growth, rising competition from offline coaching centres, and higher capital requirements. Integrating Unacademy would have required continued investment in physical centres and marketing at a time when upGrad has been tightening its focus on profitability.
Unacademy, meanwhile, has already undergone multiple rounds of restructuring over the past two years. The company has exited several non-core verticals, carried out layoffs, and narrowed its focus to test prep, even as it explores strategic options including fundraising and asset sales.
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Also Read: upGrad's IPO is on the horizon. Can it unlock its full potential?
Why This Deal Mattered for the Edtech Industry
Over the past two years, consolidation has been widely seen as the most viable path forward for a sector hit by falling enrollments, weaker consumer spending, and a sharp pullback in venture funding.Several companies—including Byju’s, Unacademy, and Vedantu—have explored mergers, asset sales, or strategic partnerships as they reshaped their businesses.
In Unacademy’s case, this is not the first time acquisition talks have failed to convert into a deal. In late 2024, the company was reported to be in discussions with offline coaching major Allen Career Institute, in a transaction that was pegged at a valuation of around $800 million. Those talks also collapsed, primarily due to differences over valuation.
Beyond Allen, Unacademy has held exploratory discussions with other education players, including K 12 Techno Services, which operates the Orchids International Schools chain. According to industry insiders, these conversations did not progress beyond early stages, as potential acquirers—many of them EBITDA positive and heavily focussed on offline models—remained unconvinced about the incremental value Unacademy would bring to their profitability and operating structure.
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For upGrad, walking away from the deal reinforces its positioning as one of the more financially disciplined players in the sector. The company has maintained that it will pursue selective acquisitions that align closely with its profitability goals and long-term IPO plans.
More broadly, the episode signals that future consolidation in edtech is likely to take the form of targeted asset buys, distressed acquisitions, or category-specific roll-ups, rather than large, headline-grabbing mergers.
Experts believe that consolidation remains a key theme, and it is increasingly clear that only businesses with strong unit economics and focussed offerings will find willing buyers. For others, restructuring, downsizing, or niche repositioning may be the more realistic path forward.
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First Published: Jan 09, 2026, 17:31
Subscribe NowNaini Thaker is an Assistant Editor at Forbes India, where she has been reporting and writing for over seven years. Her editorial focus spans technology, startups, pharmaceuticals, and manufacturing.
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