Overall, the deal fits a broader trend of consolidation in India’s edtech sector aimed at achieving scale, profitability, and sustainable growth.

Unacademy and upGrad have signed a term sheet for an all-stock acquisition, with the exact valuation to be disclosed at close, signaling a major consolidation move in India’s edtech scene.

Under the merger, Gaurav Munjal will remain as CEO of Unacademy after the transaction, while the combined group aims to extend an integrated model across K-12, upskilling, and lifelong learning.

The broader Indian edtech landscape is shifting: Byju’s faces insolvency-related issues, Physics Wallah is profitable and going public, and other players are refocusing on core digital products.

The deal follows Unacademy’s decline from its pandemic-era peak, with valuation dipping below $500 million by late 2025 amid a sector-wide slowdown.

Unacademy reports over $100 million in cash reserves and aims to stabilize finances while sharpening core offerings.

To date, Unacademy has raised about $854.3 million across 13 rounds from major investors including SoftBank, Tiger Global, General Atlantic, and Peak XV.

The transaction includes a break fee if it does not close, reflecting the edtech sector’s emphasis on profitability and scale in a cooling market.

Earlier this year, leadership transitions moved co-founders Gaurav Munjal and Roman Saini out of day-to-day roles, with Sumit Jain taking over core test-prep leadership.

Airlearn is gaining traction internationally, and executives see AI-enabled innovations as a catalyst for future growth, even as some investors worry core business attention may be diverted.

Munjal has indicated the focus is shifting toward Airlearn, an AI-first language-learning app, as a potential driver of new value despite investor concerns about priority shifts.

Unacademy has restructured by consolidating offline centers with franchise partners, launching an employee stock ownership plan buyback worth ₹50 crore, and expanding Airlearn in markets like the U.S., U.K., Germany, and Canada.