Edtech firm UpGrad has called off its proposed acquisition of Unacademy at a valuation of around USD 290 million, citing valuation concerns and business-related challenges within the Temasek and SoftBank-backed startup, according to sources.
The valuation of Unacademy, which had peaked at USD 3.4 billion in 2021, has now dropped by over 90 per cent.
"The company was valued at around USD 290 million, as per the founders, when the discussion started about the acquisition. UpGrad identified a lot of challenges related to the business of Unacademy, even though the business was acquired at USD 280 million. Therefore, the deal was called off," sources aware of the development told PTI.
A post on social media shows that Unacademy co-founder Gaurav Munjal, in December, had said that the company’s valuation had dropped to one-tenth of its peak valuation. Another post indicated that the valuation of Unacademy was Rs 2,650 crore, about USD 290 million, in December 2025.
When contacted, UpGrad co-founder Ronnie Screwvala, in a statement, said, "Yes, 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".
An email query sent to Unacademy did not elicit any reply.
Sources said that UpGrad changed its mind after realising that Unacademy's business is shrinking and there is fierce competition in the offline centre segment, which would require massive investments.
Unacademy's parent firm, Sorting Hat Technologies, narrowed standalone losses to Rs 284.3 crore in 2023-24 from Rs 1,591.2 crore in FY23. Total income dropped marginally to Rs 864.3 crore in FY24 from Rs 868.8 crore in FY23. The company has been recording erosion of net worth over the last two financial years, with net worth reducing to Rs 1,078.7 crore in FY24 from Rs 1,189.17 crore in FY23. In FY22, net worth was Rs 2,285.53 crore.
"There were also high-profile exits from the company (Unacademy), which again triggered fresh alarms for the deal. There were no discussions or negotiations around the valuation, but there were mainly business-related challenges because of which the deal could not go through," according to sources.