The proposed acquisition of edtech platform Unacademy by upGrad has been officially terminated due to disagreements over valuation, the companies confirmed on Thursday.
"We are not proceeding due to valuation differences. While we cannot comment on specific numbers, it is fair to say that we were unable to arrive at a mutually agreeable valuation", said Ronnie Screwvala, co-founder of upGrad, in a statement to NDTV Profit.
A sharp valuation decline
Reports from November indicated that upGrad was prepared to acquire Unacademy for a valuation in the range of $300-$400 million. This figure was significantly lower than Unacademy’s valuation of $3.44 billion during its last funding round in 2021. At that time, the company raised $440 million in a funding round led by Temasek, with participation from Mirae Asset Venture and notable investors such as the family offices of Oyo founder Ritesh Agarwal and Zomato CEO Deepinder Goyal.
Unacademy’s major backers include prominent global investors such as SoftBank, Tiger Global, Temasek, and General Atlantic.
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Spin-off plans separate from the deal
The acquisition had also included plans for Unacademy’s language-learning application, AirLearn, to be spun off into a separate venture. Notably, upGrad was not slated to hold any stake in the newly independent entity as part of the arrangement.
Operational challenges and shifts
In recent years, Unacademy has faced challenges that led to significant operational changes. Over the last two years, the company downsized many of its offerings, choosing to focus more intently on its core business. This pivot included cost-cutting measures such as multiple rounds of layoffs in 2022, aligning the company’s operations with shifting demand trends following the pandemic.
Despite these efforts, valuation discrepancies ultimately proved to be a stumbling block for the acquisition deal, bringing the negotiations to an end.
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