Edtech giants Upgrad and Unacademy are banking on artificial intelligence (AI) to disrupt the stagnant edtech sector. It was announced on Sunday that Ronnie Screwvala’s Upgrad will acquire the Gaurav Munjal-led company in an all-stock deal, bringing together two major names in the space.
Munjal, who will stay on as the cofounder and CEO of Unacademy, said the startup redefined the edtech playbook when it entered the market. “Along the way we lost some focus and market share, and the sector itself has not seen enough real product innovation in recent years,” he wrote in a post on X.
AI will “fundamentally reshape education”, and edtech may become one of its biggest beneficiaries, Munjal added.
Screwvala, in a separate post on X, said, “They [Unacademy] disrupted the sector once, and now with AI they plan to do it again.”
Upgrad had evaluated Unacademy earlier but pulled out due to valuation differences. Initial discussions were centred on an all-stock transaction valuing Unacademy at around USD 300 million, a steep 90 per cent drop from its USD 3.4 billion peak valuation.
Neither side has revealed the valuation of the current deal.
Rebuilding business
The deal comes amid a larger reset in India’s once-booming edtech sector, which has seen a steep fall since the Covid-19 pandemic ended. With students back in classrooms, demand for online test-prep and learning platforms has dwindled.
Unacademy was among the companies that expanded during the lockdown but has since cut costs and redirected focus to digital products, as the funding winter begins to thaw.
Munjal announced last year that Unacademy would exit its company-operated offline centres and convert them into franchise partnerships. If successful, this will allow it to return to building online products.
Upgrad wants a full-stack “K12 to forever learning” portfolio, to which Unacademy brings test-prep brand equity, offline centres, as well as AI-native products such as Airlearn. Both founders are explicitly pitching this as “the whole is bigger than the sum of the parts.”
Airlearn is Unacademy’s AI-powered language learning app offering guided conversations, real-time feedback on grammar and pronunciation, and cultural insights across 25+ languages.
Munjal said Unacademy’s cash reserves as of today “are more than USD 100M”.
