upGrad Takes Unacademy’s Cash Without Paying a Rupee

upGrad closed a Rs 1,955 crore (about $206 million) all-stock purchase of Unacademy on Tuesday, a 94% fall from the test-prep company’s $3.44 billion peak. Unacademy brought Rs 900 crore in cash, 46% of that headline price, and Gaurav Munjal stays as chief executive of the brand.

Munjal put the terms on X the same morning, on the sixth anniversary of Unacademy’s unicorn round, and did not sand the edges.

https://x.com/gauravmunjal/status/2094673724947812795

Rs 900 Crore Came With the Company

Ronnie Screwvala, upGrad’s co-founder and chairperson, put the close at about $206 million, or Rs 1,955 crore. That is the figure Unacademy holders are swapping into upGrad stock. It is also close to the cash Unacademy still held.

Munjal said the group’s topline was around Rs 400 crore, with most lines profitable or near it, and Rs 900 crore in the bank. Subtract that cash from the headline price and the operating business is changing hands at about Rs 1,055 crore. upGrad did not write a rupee cheque for it.

THE DEAL AT CLOSE

A May term sheet had still talked about Rs 2,055 crore. By late July the number had been cut by Rs 100 crore, and Unacademy holders were promised one seat on upGrad’s board. Peak XV Partners managing director Shailendra Singh is the name attached to that seat.

The brands stay. Unacademy, medical test-prep unit PrepLadder, creator tool Graphy and language app Airlearn keep their names and run as a group under Munjal, with a focus on the online products. Screwvala said he was “very excited and positive” about Airlearn, which Unacademy says already serves 10 million users in more than 150 countries.

Who Gets the Shares, and Who Got Cash

Institutional holders are rolling into upGrad equity. A smaller set of angels got cash at closing, Screwvala said, which is the only cash exit the structure allowed. That split is the deal.

WHO WALKS AWAY WITH WHAT

• upGrad: Gets the test-prep brands, Airlearn, Graphy and Rs 900 crore of cash, and pays in its own shares.
• Angel holders: Cashed out at close, per Screwvala, a narrow cheque the growth funds did not get.
• 2021 growth funds: SoftBank Vision Fund, Temasek, General Atlantic, Tiger Global, Peak XV and Nexus take upGrad paper after a 94% reset from the peak round they underwrote.
• Peak XV: Takes the single Unacademy investor seat, with Shailendra Singh named for the role.
• Employees: Four ESOP buybacks plus a Rs 45 crore exercise, after a 30-day window that replaced a 10-year one.
• Founders: Munjal stays CEO. Roman Saini moves to an advisory role. Munjal said founders and investors “didn’t create much for themselves.”
• Temasek: Sits on both cap tables, about 22% of upGrad on Tracxn’s figures, and the lead cheque in Unacademy’s 2021 round.

Tracxn’s cap table now puts Unacademy’s founders at 9.3% and the ESOP pool at 9.6%, with Nexus at 14% and SoftBank Vision Fund at 11.8%. upGrad’s founder group is at 29.1% and Temasek at 22.2% on the same dataset, before the new Unacademy paper is issued.

Paper instead of that Rs 900 crore is the complaint that will follow this close. A still-private upGrad share is a bet on Screwvala’s listing plan, not a recovery of the 2021 book. Munjal is making that bet on purpose. “Sometimes, you are drawn towards a path that is more exciting than the one that makes you more money,” he wrote.

The $3.44 Billion Round This Sale Closes

Unacademy raised about $880 million across 13 rounds. The round that still defines the company came in August 2021, when Temasek led a $440 million Series H at $3.44 billion and SoftBank Vision Fund 2, General Atlantic, Tiger Global, Mirae Asset, Zomato founder Deepinder Goyal and OYO founder Ritesh Agarwal came in behind it.

Munjal said at the time the fresh money would scale Unacademy, jobs product Relevel and Graphy, including digital goods. Physical classrooms had been shut, paid users were still climbing, and Chinese tutorship stocks had just been crushed, so global funds treated Indian test prep as the next large pool. Byju’s, then valued at $22 billion, was the loudest name in that queue and later went into insolvency in 2024.

Unacademy cut costs, closed businesses and pushed the remaining lines toward profit rather than follow that path. The 2021 book did not come with it. Funds that wrote cheques at $3.44 billion are now exchanging that paper for a slice of a company last priced at $1.73 billion in May, when Incwert Advisory marked upGrad after an internal round.

Munjal’s own line on Tuesday was the cleanest account of that math. “We raised at a peak, but sold at a fraction of that. I’m not going to dress these facts up. But I am proud of what this team did between those two numbers.” He added that the free Unacademy platform made a generation of celebrity teachers, and that their YouTube videos crossed 10 billion views.

Option Holders Had 30 Days or Zero

The people inside the company had a harder path to any of that paper. In December, while the first round of talks with upGrad was still live, Unacademy cut the ESOP exercise window for former staff from 10 years to 30 days. Munjal said the live talks pointed to a deal around Rs 2,650 crore, and that preferred holders who came in above that price had a right to wipe common stock.

Since the valuation is significantly lower than the money raised by Unacademy, which is over $800 million, shareholders have a right to apply liquidation preference, especially those who came at a higher valuation and who will be losing money in an M&A at this valuation. This is our best way to provide some value to their contributions to Unacademy. Else it would all go down to zero.

Gaurav Munjal, co-founder and CEO, Unacademy

He also said almost half his own holding sat in ESOPs, and that he was sorry. The company later ran four buybacks that, in his telling, created value for staff even as founders and funds did not. About 1,000 of 1,100 former employees then joined a Rs 45 crore exercise so they would hold shares in the merged company rather than options that preferred stock could zero out.

That is why the employee story and the investor story are not the same loss. Staff who paid in and converted kept a claim. Holders who came in at $3.44 billion kept a claim too, just a much smaller one, in someone else’s cap table.

A Lunch in 2020 and a Term Sheet in March

Screwvala’s version of the close starts six years earlier than the term sheet. He wrote that Munjal first came to lunch in 2020 at Taj Lands End in Mumbai, sat with him and then-upGrad co-founder Mayank Kumar, and pitched a combination. “He came in proposing he could run the whole combined entity,” Screwvala wrote. upGrad did not take that offer.

Munjal came back in late July 2025, Screwvala said, and laid out the crossroads Unacademy was in. Formal talks ran through November, then broke in January over price, after upGrad had been looking at $300 million to $400 million. Unacademy used that pause to tell staff it would shut company-owned offline centres and move those sites onto franchise partners. Talks restarted in March with a 100% share-swap term sheet and a break fee, and upGrad filed with the CCI in May.

THE PATH TO YESTERDAY

1. 2020: Munjal lunches Screwvala and Kumar in Mumbai and offers to run a combined firm.
2. August 2021: Temasek leads a $440 million round at $3.44 billion.
3. Late July 2025: Munjal reopens the conversation and, in Screwvala’s account, describes Unacademy as at a crossroads.
4. November 2025: Advanced talks, with upGrad still thinking in the $300 million to $400 million range.
5. January 2026: Talks collapse on price; Unacademy moves offline centres to franchise.
6. March 2026: A 100% share-swap term sheet is signed, with a break fee.
7. May 2026: CCI filing; Screwvala leads a Rs 361 crore internal round at $1.73 billion, putting in Rs 300 crore himself.
8. July 7, 2026: The CCI approved the Sorting Hat combination under Section 31(1).
9. September 1, 2026: The share swap closes at Rs 1,955 crore.

Sorting Hat Technologies Private Limited is Unacademy’s legal parent, and the CCI approved both a share purchase in that company and its merger into upGrad Education Private Limited. Screwvala had just recapitalised his own vehicle. He put in Rs 300 crore, Temasek added Rs 45 crore, and IFC and 360 ONE took the rest of a Rs 361 crore internal round. People around that raise said Unacademy’s cash would take upGrad’s pool to about Rs 1,260 crore once the swap closed. The May round looks, in hindsight, like dry powder raised against a cash pile that was already on the other side of the table.

upGrad Already Bought the Rest of the Ladder

Test prep is the piece upGrad did not have. Screwvala has spent the past year buying the rungs around it with the same tool, his own stock. In February upGrad announced a 90 percent stock swap for Internshala, the internship marketplace, and left founder Sarvesh Agrawal in charge. Internshala listed 34 million registered users, 450,000 employers and about 3 million active applicants a year, on a Rs 45 crore revenue base that upGrad said it wants above Rs 100 crore.

Two weeks before Tuesday’s close, upGrad posted FY26 figures that show why it can pay in paper. It reported gross revenue of $219.5 million, or Rs 2,070 crore including taxes, up 7%, and said Ind-AS EBITDA rose more than eightfold to Rs 123 crore from Rs 15 crore. Net loss narrowed 52% to Rs 130 crore, the third year running that losses more than halved, from a peak of Rs 1,142 crore in FY23. CFO Mukesh Mundra called it a year of cost control. The company also sits on Rs 530 crore of collected fees it has not yet booked.

UPGRAD IN FY26

• Gross revenue: Rs 2,070 crore including taxes, up 7%, with Ind-AS total income of Rs 1,732 crore.
• EBITDA: Rs 123 crore, more than eight times the Rs 15 crore posted a year earlier.
• Net loss: Rs 130 crore, down 52%, against a FY23 peak loss of Rs 1,142 crore.
• Scale: More than 100,000 learners at a time, and more than 700 enterprises on the skilling side.

Screwvala’s line on those numbers already treated Unacademy as closed. “Over the next few years, our focus is growth, both organic and through acquisitions, including Internshala and Unacademy, which we are now closing. With these, we complete upGrad’s integrated story: serving learners across their entire lifecycle.” People close to both firms say Munjal and Screwvala will spend about six months deciding whether Airlearn, a roughly 25-person app that Munjal called one of the world’s three most-downloaded language products in under two years, stays inside the group or raises outside money.

Single-vertical test prep, even a profitable one with Rs 900 crore in the bank, was not a listing story on its own. People around the deal have said as much, that no one education category in India is large enough to carry a public market debut. That is the ceiling Munjal chose not to keep testing. The cash, the teachers, PrepLadder, Graphy and Airlearn now sit inside upGrad Education, and Munjal is still running the brands.

Frequently Asked Questions

What Is Sorting Hat Technologies in This Deal?

Sorting Hat Technologies Private Limited is Unacademy’s legal parent, and it is the company named in CCI combination C-2026/05/1419. The regulator approved both a purchase of shares in Sorting Hat and a merger of that company into upGrad Education Private Limited, and said a detailed order would follow the 7 July clearance.

When Did Unacademy First Become a Unicorn?

Unacademy crossed unicorn status in September 2020 after a $150 million round that valued the company at $1.45 billion, six years to the day before Tuesday’s close. The later Temasek-led Series H in August 2021 is the round that took the peak to $3.44 billion.

What Happened to Unacademy’s Offline Centres in January?

After the first round of talks with upGrad collapsed in January, Munjal told staff the company would shut company-owned offline centres and move those sites onto a franchise model. That operational shift is separate from Tuesday’s share swap, which covers the online test-prep brands, PrepLadder, Graphy and Airlearn.

Where Will PrepLadder Be Based After the Close?

PrepLadder’s headquarters is moving from Chandigarh to Bengaluru, where Unacademy, Airlearn and Graphy will also operate. Co-founder Roman Saini is moving into an advisory role, and Munjal remains chief executive of the Unacademy group inside upGrad.