Unacademy’s Value Crashes Below $500M as Founder Confirms M&A Talks
Unacademy, the Indian edtech company that was once highly valued and looked up to, has informed its shareholders that the company’s valuation has significantly changed from a peak of around $3.5 billion during the pandemic to less than $500 million at present. On the occasion of Unacademy’s tenth anniversary, a message shared on X, co-founder and CEO Gaurav Munjal, revealed that the firm is currently looking at merger and acquisition (M&A) options.
Munjal confesses that the past three years have been the toughest period of his life. He stated that the company had never experienced a month of contraction until 2021 but after demand fell, as students went back to offline classes, growth slowed down, market share decreased, and rivals started to lower their prices to attract customers. The company reacted in abandoning its previously aggressive expansion plan.
The company from 2022 stopped the costly trend and focused heavily on saving money. According to Munjal, Unacademy brought down the annual burn from about ₹14 billion (approx. $155.7 million) to less than ₹1.75 billion (around $19.5 million) this year. The company achieved the reductions through layoffs, cutting down of marketing expenses, and more efforts in its core subscription service.
Unacademy had attracted the investment of over $854 million by 13 funding rounds. Its investors were major players such as SoftBank, Tiger Global, General Atlantic, and Peak XV Partners.
India’s edtech market, a nation that has always been full of demand and competition, suffered from the majority of the sector due to the demand slowdown and the rise of competition. While some players have closed their doors for good, others like Physics Wallah have emerged victorious and even expanded their businesses. Physics Wallah made a successful debut in public markets in November.
Munjal further disclosed that the leadership at the company is giving more attention to a new AI-first language-learning product, AirLearn. According to the pivot, some investors were worried that the main business of Unacademy was being neglected during the critical period.
There were also recent rumors suggesting that UpGrad, a company specialized in competitive learning, may be in talks with Unacademy about an acquisition offer ranging from $300 to $400 million.
The sharp drop in valuation and the presence of M&A talks looming over the company are the factors that reveal the difficult reality that edtech companies face in trying to maintain the boom that came after the pandemic. For Unacademy, it looks like the next move might be either to merge with another company or reinvent itself.
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