Indian education company Unacademy is being bought by rival upGrad in a deal that shows how badly the online learning business has crashed. Unacademy was worth $3.5 billion just two years ago, but now it’s selling for less than $500 million.
This isn’t just about one company struggling. India’s entire online education industry is collapsing after a massive boom during COVID-19. When schools closed, millions of students went online and investors poured money into edtech startups.
The Bubble Bursts
Unacademy was one of India’s biggest success stories, offering online classes to help students prepare for competitive exams. The company raised hundreds of millions of dollars and hired aggressively during the pandemic.
But as schools reopened, students went back to in-person classes. Parents stopped paying for expensive online courses. Unacademy had to lay off thousands of employees and shut down several programs.
The share-swap deal means Unacademy shareholders will get upGrad stock instead of cash. upGrad, which focuses on professional courses for working adults, has been more stable than competitors targeting school students.
This merger is part of a bigger trend in India’s startup world. Companies that raised money at sky-high valuations during COVID are now selling themselves for much less or shutting down entirely.
What’s Next
Expect more edtech companies to merge or disappear as the industry continues shrinking. The survivors will likely focus on specific niches rather than trying to replace traditional education entirely.