Allen Career Institute in Advanced Talks to Acquire Unacademy for $800 Million

Allen Career Institute is reportedly in advanced negotiations to acquire Unacademy, one of India’s prominent edtech startups, for $800 million—a significant decline from Unacademy’s $3.4 billion valuation in 2021, as per the Economic Times.

The deal, if finalized, could mark a watershed moment in India’s edtech industry, potentially making it one of the largest mergers in the sector. Negotiations have been ongoing for months and are now awaiting the green light from Allen’s promoters, the Maheshwari family.

Deal Structure and Valuation
Investment banks are currently working on the share swap ratio, which will determine how many Allen shares will be exchanged for each Unacademy share. The deal is also expected to include cash payouts for Unacademy’s founders and early investors. The $800 million valuation includes Unacademy’s $160 million cash reserves, signaling a steep markdown from its peak valuation.

The discussions are spearheaded by Bodhi Tree, an investor in Allen, and Unacademy co-founder Gaurav Munjal. Once the deal is completed, it is expected to redefine the dynamics of India’s edtech space, combining Allen’s offline expertise with Unacademy’s digital learning capabilities.

Leadership Transitions
Post-merger, Unacademy’s co-founders—Gaurav Munjal, Roman Saini, and Sumit Jain—are likely to exit the company. This follows the earlier departure of Hemesh Singh, Unacademy’s Chief Technology Officer, in 2023. Unacademy has been undergoing a challenging phase, implementing restructuring measures to optimize costs, including the layoff of 250 employees in July and the exit of several top executives.

A Shift in the Edtech Landscape
This potential acquisition underscores the consolidation trend in the edtech industry, especially as startups face pressure to achieve profitability in a post-pandemic world. The merger could allow both companies to leverage their strengths—Allen’s well-established offline presence and Unacademy’s robust online platform—to create a comprehensive education ecosystem.

Key Highlights

Unacademy’s valuation has dropped significantly, reflecting a challenging market environment for edtech startups.
The merger is likely to result in significant synergies, combining the best of offline and online education.
With founders exiting, Allen will likely take complete control of Unacademy’s operations.

Author: Sania Khan