According to TechCrunch, Unacademy CEO Gaurav Munjal posted a detailed note on X this week marking the startup’s 10th anniversary, where he confirmed its valuation has crashed to less than $500 million. That’s a staggering 85% drop from its pandemic-era peak of $3.5 billion just three years ago. Munjal also confirmed the company is actively engaged in merger and acquisition talks. He admitted the last three years involved “shrinking demand,” intense competition, and internal turmoil, forcing the company to slash its annual burn from about $156 million in 2022 to under $20 million now. This steep reset comes as rival UpGrad is reportedly in talks to acquire Unacademy for between $300 and $400 million.
The post-pandemic edtech reckoning
Here’s the thing: the entire narrative of Indian edtech has completely flipped. During the lockdowns, companies like Unacademy and Byju’s were printing money, thinking the shift to online learning was permanent. They raised billions, hired like crazy, and spent a fortune on marketing. But it was basically a sugar rush. Once schools reopened, growth evaporated almost overnight. Students went back to classrooms, and these startups were left holding the bag with bloated cost structures and a market that suddenly got a lot smaller.
Look at the extremes now. Byju’s, once India’s most valuable startup, is a total disaster—its valuation is effectively zero, it’s in insolvency, and its founder is being ordered by a U.S. court to pay over a billion dollars. And then you have Physics Wallah, the long-time underdog. They turned profitable, kept expanding sensibly, and just had a strong public debut. It’s a classic tale of the tortoise and the hare, but with billions of dollars at stake.
Founder admissions and shifting focus
Munjal’s note is surprisingly candid. He says they “got complacent” and failed to innovate on price as competitors copied their model and undercut them. “We saw losing market share in the game that we literally invented and it hurt,” he wrote. That’s a brutal self-assessment from a founder. But it also highlights a bigger problem: his attention seems to be elsewhere now.
TechCrunch reports he’s been devoting increasing time to AirLearn, his new AI-powered language learning app that’s basically a Duolingo clone. And that’s created friction with investors who feel the core Unacademy business is being neglected during this critical, difficult phase. Can you blame them? When your main ship is taking on water, it’s a strange time to start building a new, flashy speedboat.
What’s next: acquisition or more pain?
So where does Unacademy go from here? The reports of UpGrad’s acquisition interest in the $300-400 million range make sense. It would be a classic consolidation move in a battered sector. A sale at that price would be a massive loss for investors like SoftBank and Tiger Global, who poured in over $850 million, but it might be the best possible exit at this point.
The company has done the hard work of cutting burn and refocusing on its core subscription business. But the market has fundamentally changed. The pandemic boom wasn’t just a peak; it was a distortion. Now, the real, sustainable market is being revealed, and it’s much, much smaller than anyone anticipated. Unacademy’s story is the starkest warning yet for any startup that mistakes a temporary, crisis-driven surge for a permanent shift in human behavior.
