Whalesbook
Deal Collapse
upGrad has dropped its bid to acquire rival edtech firm Unacademy, sources familiar with the matter reported. The protracted negotiations failed primarily due to an inability to align on the financial valuation of Unacademy.
Valuation Chasm
The primary sticking point was Unacademy's asking price. Reports suggest Unacademy was seeking a valuation in the range of $300 million to $400 million. The specific valuation upGrad was prepared to offer remains undisclosed, but it was evidently insufficient to secure the deal.
Sector Slowdown Impact
This breakdown occurs over a month after Unacademy co-founder and CEO Gaurav Munjal publicly confirmed that the startup was engaged in merger and acquisition talks. The edtech sector has faced significant headwinds post the pandemic-induced boom, leading to a re-evaluation of market valuations. Unacademy's own valuation has reportedly fallen drastically from its 2021 peak of $3.5 billion.
Past Acquisition Efforts
Unacademy has been exploring potential M&A activities for over a year amid the sector's slowdown. Previously, it was reported that Allen was in talks to acquire Unacademy for $800 million, a deal that was denied by Munjal at the time. This latest setback for a potential acquisition highlights the persistent challenges in the current edtech investment climate.