The Unacademy founder says the startup is now worth less than $500 million, and confirms merger and acquisition talks

Unacademy, once one of India’s most popular edtech startups, may now be worth less than $500 million, 85% below its pandemic-era peak valuation, as the company undergoes a sharp reset and explores merger and acquisition options.

In a detailed note published on He also confirmed that the startup is in merger and acquisition talks.

India’s edtech scene has been shattered since the outbreak of the pandemic, when the sector witnessed a rare moment of opportunity during the lockdowns. Startups like Unacademy and Byju’s raised billions, hired freely, and invested heavily in sales and marketing to attract customers, but growth stalled after lockdowns eased and students returned to offline classrooms.

Byju’s, India’s most valuable startup just three years ago, saw its value drop to virtually zero and entered insolvency proceedings in September last year. In November, a US bankruptcy court ordered its founder Byju Raveendran to pay more than $1.07 billion for ignoring court directions and providing “evasive and incomplete” responses regarding a $533 million transfer by the startup’s US unit that it never recovered.

Meanwhile, Physics Wallah, long considered an underdog, has turned profitable and continues to expand, last month seeing a strong public market debut.

The past three years have been characterized by shrinking demand, intensifying competition and internal turmoil as the startup suffered losses and abandoned aggressive expansion plans, Unacademy’s Munjal said in his note.

“On a personal level, for us founders, this has been the most difficult three years we have ever experienced in our lives because until 2021, we had not seen a single month of decline.” [sic]”But in the last three years we’ve seen our market share lost in the game we literally invented and it’s hurtful,” he wrote.

Munjal believes the recession was driven by the rapid shift in market dynamics post-pandemic. As students returned to offline classes and competitors launched low-priced offerings similar to Unacademy’s early strategy, the company saw demand decline and growth stagnate.

“We became complacent,” he wrote, adding that the company had failed to innovate on price even as competitors undercut it.

In recent months, Munjal has devoted increasing attention to AirLearn, his new AI-driven language learning app that mimics Duolingo’s game-based approach. The shift has created friction with some Unacademy investors, who feel its core edtech business has been left adrift during a difficult phase, people familiar with the matter told TechCrunch.

Founded in 2015, Unacademy has raised about $854.3 million over 13 funding rounds, according to PitchBook, and its backers include SoftBank, Tiger Global, General Atlantic and Peak XV Partners.

Unacademy has spent the past two years overhauling its operations, reducing its annual burn from 14 billion rupees (about $155.7 million) in 2022 to less than 1.75 billion rupees (about $19.5 million) this year, Munjal said. The startup has significantly reduced headcount through layoffs, cutting marketing costs, and refocusing on its core subscription business.

Recent reports indicated that rival UpGrad has discussed acquiring Unacademy for between $300 and $400 million.