Unacademy is valued at less than $500M, its founder admits, while confirming M&A negotiations.

Unacademy’s valuation drop and M&A talks.Gaurav Munjal, co-founder and CEO of Unacademy, has confirmed that the Indian edtech startup’s valuation has plummeted to less than $500 million, representing an 85% decline from its pandemic-era peak of $3.5 billion. In a candid note posted on X marking the company’s 10th anniversary, Munjal acknowledged that the company is actively exploring merger and acquisition options, with the board and management team examining strategic combinations. Recent reports suggest that rival UpGrad has discussed acquiring Unacademy for between $300 and $400 million, a figure that would mark a dramatic reset for one of India’s once-celebrated online education platforms. Founded in 2015, Unacademy has raised approximately $854.3 million over 13 funding rounds from prominent investors including SoftBank, Tiger Global, General Atlantic, and Peak XV Partners.

Munjal described the last three years as the most difficult period the founders had ever experienced, marked by shrinking demand, intensifying competition, and internal turmoil. He admitted that chasing high valuations during the boom years led to strategic missteps and unsustainable cash burn levels, acknowledging the company failed to anticipate how quickly the market would shift after the pandemic. The company’s subscription model had scaled rapidly from zero revenue in January 2019 to $1.8 million by September that year, eventually attracting nearly one million paid subscribers during the pandemic peak. However, the dramatic return to offline coaching centers and fierce price competition from rivals severely impacted growth, causing Unacademy to lose market share in categories it once dominated.

In response to these challenges, Unacademy has spent the past two years overhauling operations, slashing annual cash burn from ₹14 billion (around $155.7 million) in 2022 to less than ₹1.75 billion (approximately $19.5 million) this year through significant headcount reductions, marketing cuts, and refocusing on core subscription business. Munjal emphasized a shift in priorities, stating he now cares more about building great products, achieving strong unit economics, and growing profitably rather than chasing valuations. The founder confirmed the company is open to merging with a larger entity if it creates a win-win situation, signaling that consolidation remains a viable path forward as Unacademy navigates one of the most challenging periods in India’s edtech sector.