Ronnie Screwvala-founded higher learning firm UpGrad and test-prep startup Unacademy have sought antitrust approval from the Competition Commission of India (CCI) for their proposed merger, showed documents published by the regulator.
ET had first reported on May 4 that the transaction was in its final stages and that the CCI filing was expected as early as this week.
Under the deal, UpGrad will acquire Unacademy in an all-stock transaction valuing the SoftBank- and Peak XV Partners-backed startup at Rs 2,055 crore (around $218 million)—a 90% markdown from its peak valuation of $3.4 billion in 2021.
Unacademy is expected to have a cash balance of Rs 900-950 crore once the deal closes, likely in June-July.
The two companies began discussions in November last year, but talks hit a roadblock in January over a mismatch in valuation expectations. In March, Screwvala and Unacademy cofounder Gaurav Munjal announced on social media that they had signed a term sheet for UpGrad to acquire Unacademy in a 100% share-swap deal.
The CCI filing marks a key procedural step towards closing the transaction.
“The proposed combination will enable the acquirer (UpGrad) to enter the online test preparation segment, in which it does not currently have a presence,” per the transaction summary published by the competition watchdog. “It will also broaden the range of learners served by the acquirer pursuant to the proposed combination. For the shareholders of the target (Unacademy), the proposed combination provides an opportunity to realise shareholder value in a consolidated entity.”
Singapore sovereign wealth fund Temasek is a common investor in both companies—holding 22% in UpGrad and 5% in Unacademy.
The transaction is among the biggest consolidation moves in India’s edtech sector, which has been battling a prolonged slowdown after the pandemic-driven boom in online learning faded. The industry has also been hit by the fallout from the collapse of Byju’s, once India’s most valuable startup with a peak valuation of $22 billion.
Founded in 2010 by Gaurav Munjal, Hemesh Singh, and Roman Saini as a YouTube channel, Unacademy pivoted into a full-fledged edtech platform in 2015 and emerged as one of the sector’s most prominent startups during the pandemic. In recent years, however, the company has shifted focus towards offline coaching centres as growth in online learning moderated.
Source: Economic Times