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upGrad Bags Rs 360 Crore for Unacademy Deal and AI Growth
upGrad, founded by Ronnie Screwvala, has completed an internal funding round totaling Rs 360 crore, with a large part coming from Screwvala. This funding comes at a key time, helping the edtech company aim to strengthen its market position. The main goals are to finalize the purchase of rival Unacademy and increase spending on AI-powered learning and workforce training.
Buying Unacademy: A Deal at a Steep Discount
The funding supports upGrad's plan to buy Unacademy, a deal that involved tough talks and past disagreements over its value. The acquisition is reportedly moving towards approval from the Competition Commission of India (CCI). Unacademy is valued at about $218 million (₹2,055 crore) in this deal. This price is a sharp 90% drop from its high of over $3.4 billion in 2021, showing how much the Indian edtech market has corrected.
This deal helps upGrad quickly build a strong presence in online test preparation, an area where it was weaker. The combined company is set to offer a complete learning system, covering everything from test prep to professional skills and business training. Unacademy has been working to cut costs and become more financially stable, making it a more appealing target despite its lower valuation. If the deal closes, the combined company expects to have substantial cash for further growth.
Edtech Shake-up: Consolidation and AI Take Center Stage
upGrad's funding and Unacademy pursuit reflect a major shift in India's edtech industry. After rapid growth and high investor excitement during the pandemic, the sector has hit a difficult funding period. Companies are now focusing on sustainable business models, profitability, and strategic mergers rather than just rapid expansion.
Although overall funding in Indian edtech has dropped sharply since 2021, the sector is starting to recover with new ideas. Experts point to AI's increasing role in personalized learning, smart systems, and automation – areas upGrad plans to invest heavily in. While platforms like Coursera and Udemy serve specific needs, Indian companies such as upGrad and PhysicsWallah are seeking wider market reach through acquisitions and varied offerings.
Risks Ahead: Integrating Unacademy and Market Challenges
However, the acquisition is not without risks. Merging two large edtech companies, especially one that has seen major value shifts and operational changes, is complex. Unacademy's past difficulties, such as cost cuts and moving away from a fully online approach, show how unpredictable the edtech market can be.
Investor confidence in the edtech sector has been shaken by major failures, including the challenges faced by Byju's. While mergers aim to build stronger companies, achieving lasting profitability is still difficult. Investors are now carefully examining business models for real value and efficiency, not just fast growth. The past termination of the upGrad-Unacademy deal in January 2026 due to valuation differences serves as a stark reminder of the delicate balance required for such transactions.
Building a 'Forever Learning' Future
Founder Ronnie Screwvala, who previously built UTV, sees upGrad as a leader in 'forever learning' rather than just an edtech firm. With plans for a future IPO in India, upGrad focuses on combining upskilling and professional development. The company reported revenue of about Rs 2,400 crore for the fiscal year ending March 2024, showing its significant size. This funding and the Unacademy deal are key moves towards building a leading platform in the fast-changing education sector.