The planned acquisition of test preparation company Unacademy by post-secondary education company upGrad was called off due to both firms having differences in valuations, according to reports.
“Yes, we are not proceeding due to valuation differences. While we cannot comment on specific numbers, it is fair to say that we were unable to arrive at a mutually agreeable valuation,” Ronnie Screwvala, co-founder of upGrad, informed Entrackr.
Screwvala’s upGrad was set to accquire Unacademy for a valuation of $300-$400 million, as per reports in November. Unacademy’s investors were also to obtain a minority stake in the acquiring company worth $2 billion.
This amount signalled a notable downturn from the previous valuation of $3.44 billion that the company had in 2021.
The original deal involved the acquisition of the firm along with Unacademy’s language-learning application AirLearn being spun off into a seperate venture, with upGrad having no stake in AirLearn.
AirLearn was to be helmed by founders Gaurav Munjal and Roman Saini. Munjal and Saini moved away from operational roles and selected co-founder Sunil Jain for the position of chief executive of Unacademy’s core test-preparation business.
Unacademy had downsized its operations with regards to many of its offerings in the past two years, honing its focus on the core business in order to keep costs in check. It undertook many layoffs in 2022 and geared its operations to cater demand trends that emerged after the pandemic.
The company had also suspended its proposed amendments to its 2018 Employee Stock Option Scheme scheme after stringent opposition from former employees.
The pushbacks concerned the tax implications and liquidity issues connected to exercising stock options at a notably lower valuation in comparison to previous rounds.
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