Startup Deep Dive : Unacademy — a $3.4 billion valuation, sold for $206 million

In August 2021, investors valued Unacademy at $3.44 billion, as reported by Bloomberg and Business Standard. Five years on, in September 2026, upGrad completed an all-stock deal to buy the company for about $206 million — a fall of roughly 94% from that peak, and proof that a test-prep platform can look like India’s next giant while quietly losing the argument with its own economics.

Unacademy was never short of ambition or of capital: about $880 million raised across 13 rounds from SoftBank, Temasek, Tiger Global and General Atlantic, all funnelled into a company that began as one engineering student’s YouTube channel. What it struggled with was turning millions of free viewers into paying subscribers, and paying subscribers into a business that could stand on its own once venture money stopped arriving. By the time it found a version of that business, the wider market for edtech had already moved on.

Quick facts

What they do

Unacademy sells exam preparation to Indians chasing a government job, a medical seat or an engineering admission. Its courses cover the country’s biggest competitive exams — the UPSC civil services exam, JEE and NEET for college entrance, CAT for business school, banking and defence exams, and postgraduate medical entrance through its subsidiary PrepLadder — delivered as live online classes, recorded video, test series and, increasingly, in-person coaching at physical centres. A separate arm, Graphy, sells course-hosting software to independent educators and creators rather than to students directly. The common customer across all of it is a young Indian, or a Indian family, willing to pay for a shot at a exam that decides a career.

The origin

Unacademy began in January 2015 as a YouTube channel run by Gaurav Munjal, then an engineering student in Mumbai, who posted a short tutorial on computer graphics to help classmates prepare for an exam. Munjal was not new to building companies — he and Hemesh Singh had already built and sold Flatchat, a flatmate-matching app, to the real-estate portal CommonFloor. In December 2015, Munjal brought in Singh, who became the company’s technical co-founder, and Roman Saini, who joined as the third co-founder. Saini’s own path was unusual: he had cleared the entrance exam to the All India Institute of Medical Sciences at 16, then cracked the Union Public Service Commission’s civil services exam at 22 and served as an Indian Administrative Service officer in Madhya Pradesh before resigning in 2015 to help build Unacademy. The founding insight was simple: India had a near-infinite appetite for exam coaching, most of it delivered by expensive, geographically limited coaching institutes, and a smartphone-and-YouTube generation would pay for the same expertise delivered online, at a fraction of the cost of relocating to a coaching hub such as Kota.

The struggle years

The pandemic-era boom that made Unacademy a unicorn was followed by a much longer stretch of contraction, and the company has been candid, in its results and in press statements, about how severe it was. Losses peaked at Rs 2,847.9 crore in FY22, as reported by Inc42 from regulatory filings, even as the company kept hiring and spending heavily on marketing through the pandemic years. The correction that followed took years and several rounds of job cuts. In April 2022, Unacademy let go of about 1,000 contractual and full-time staff. In November 2022, it cut roughly 350 more jobs, about 10% of its workforce, as funding for Indian startups dried up. In March 2023, it cut a further 12% of its workforce, around 380 roles, with its NEET-PG platform PrepLadder separately cutting 145 jobs. By July 2024, the company was still cutting, removing another 250 positions. Leadership turned over alongside the headcount: in June 2024, co-founder Hemesh Singh stepped down as chief technology officer to an advisory role, a move that followed the departure of the company’s chief operating officer and chief financial officer in the preceding months, as reported by Entrepreneur India. From a workforce of around 6,000 in early 2022, Unacademy had shrunk to about 1,799 employees by July 2025. The most recent structural change came in January 2026, when the company said it would convert its company-run offline Unacademy Centres into franchise-operated centres by April 2026, handing day-to-day running of physical coaching to local partners in order to cut its own overheads, according to Entrackr.

The turning point

The single event that defined Unacademy’s trajectory was its 2019 shift from a free content platform to a paid subscription business, supercharged a year later by the COVID-19 lockdowns. Before the pivot, Unacademy earned essentially nothing from its content: it was a free YouTube-style library of “Educator” videos with no subscription revenue in January 2019. After it introduced live, paid classes under the Unacademy Plus subscription, revenue began compounding, and by February 2020 the company had about 90,000 paying subscribers. Then the lockdowns hit: with schools and coaching centres shut nationwide, Unacademy’s revenue rose 82% month-on-month in April 2020 and was reported to be roughly ten times higher than the same month a year earlier, as per YourStory’s contemporaneous reporting. Paid subscribers climbed toward a reported one million within the following year. Investors moved just as fast: SoftBank valued the company at $1.45 billion in September 2020, Tiger Global and Dragoneer pushed that to $2 billion two months later, and by August 2021 a Temasek-led round put the number at $3.44 billion. A company with no subscription revenue in January 2019 was, thirty-one months later, valued at more than three billion dollars — the clearest before-and-after in Unacademy’s history.

The money behind it

Unacademy’s capital-raising followed the shape of most well-connected Indian consumer startups of its era: a small early round from specialist venture investors, then a rapid escalation once growth metrics turned heads. Sequoia India and SAIF Partners backed the company early, putting in $11.5 million in 2017 when Unacademy was still a modest subscription business. Facebook invested in 2019, around the time the company crossed into meaningful paid revenue. SoftBank’s Vision Fund arrived in September 2020 with about $150 million, at a $1.45 billion valuation (Bloomberg) — the round that made Unacademy a unicorn and validated the pandemic growth story to other large investors. Tiger Global and Dragoneer followed two months later, buying in at a $2 billion valuation. The largest round came in August 2021: a $440 million raise led by Singapore’s Temasek, with South Korea’s Mirae Asset joining alongside existing backers SoftBank, General Atlantic and Tiger Global, valuing the company at $3.44 billion (Bloomberg; Business Standard/PTI) — up more than 70% from its valuation less than a year earlier. By August 2021, cumulative funding stood at about $860 million, per KrAsia’s reporting at the time; by the time of its 2026 sale, TechCrunch put total funding raised across the company’s history at about $880 million over 13 rounds. Each of the marquee backers changed something concrete: Sequoia India’s early cheque funded the shift to paid content; SoftBank’s unicorn round unlocked pandemic-era marketing budgets; and Temasek’s 2021 round, the company’s last primary raise at scale, funded the build-out of physical Unacademy Centres just as the online growth curve began to flatten. None of that capital was returned at anything like its invested value: the September 2026 sale to upGrad, an all-stock deal, valued Unacademy at about $206 million, or Rs 1,955 crore, with angel investors cashed out and institutional shareholders receiving upGrad shares instead of cash, as reported by TechCrunch and YourStory.

How it makes money

Unacademy’s core revenue comes from subscriptions: students pay for tiered access — branded Unacademy Plus and Iconic — to live classes, recorded lectures, test series and mentorship from named “educators,” most of whom are paid a share of that subscription revenue or a fixed fee rather than being salaried teachers. PrepLadder runs the same subscription logic for doctors preparing for postgraduate medical entrance exams and the US medical licensing exam. Graphy earns differently: it charges other educators and creators a software fee or revenue share for hosting and selling their own courses, making it closer to a business-to-business tools company than a test-prep brand. Offline Unacademy Centres charge upfront coaching fees, similar to any bricks-and-mortar coaching institute, and are now shifting to a franchise structure in which local operators pay for the right to run a centre under the Unacademy brand while the parent supplies curriculum, technology and academic content. Costs run in roughly the opposite direction of a typical software business: educator payouts, coaching-centre rent and staff, and — historically the largest line item — customer-acquisition marketing, which the company has cut sharply since 2022. Margin has been improving unevenly: several verticals, including UPSC, NEET PG and CAT preparation, have turned contribution-margin positive, according to Entrackr’s January 2026 reporting on the centres restructuring, even as the group as a whole remained loss-making. The part most outsiders get wrong is the source of that improvement: it came less from Unacademy’s famous YouTube-adjacent online product and more from the unglamorous, capital-intensive business of running physical coaching centres, which by 2023 had become the company’s fastest-growing and, per one industry analysis of its filings, close to half of its revenue.

The numbers

Unit: Rs crore, consolidated (Sorting Hat Technologies Private Limited), as reported by Entrackr from regulatory filings.

The pattern across three years is not growth: revenue fell in both FY24 and FY25, by 5.3% and 16.4% respectively year-on-year. What improved was loss control — the net loss narrowed by 62% in FY24 and a further 31% in FY25, driven mainly by cost cuts rather than by any recovery in sales. EBITDA losses tell the same story: Rs 489 crore in FY24, narrowing to Rs 305 crore in FY25, a 38% improvement, as per Entrackr’s exclusive report. Cash reserves stood at Rs 1,238 crore as of the FY25 close, which is why the company could keep operating and negotiating a sale rather than being forced into a distressed shutdown.

Where the money comes from

The surprise in Unacademy’s revenue mix is how far it has drifted from its founding identity as an online-only platform. In calendar year 2023, revenue from offline Unacademy Centres grew to Rs 400 crore, up 655% from Rs 53 crore the year before, while revenue from the original online test-prep business fell 15% to Rs 620 crore from Rs 732 crore, according to reporting by The Arc based on the company’s own disclosures. That is close to a 40:60 split between physical centres and the online product within a single year, and it means a company that built its brand on making expensive, location-bound coaching unnecessary now depends heavily on the very brick-and-mortar model it once set out to compete against. Geographically, the business remains almost entirely India-focused, tracking the country’s exam calendar rather than any meaningful international market; PrepLadder’s USMLE offering is the one product aimed partly at doctors seeking to work abroad.

The risks

Three risks sit close to the surface of Unacademy’s business, and none of them is hypothetical. First, regulation: the Ministry of Education’s coaching-centre guidelines, issued in January 2024, apply to any coaching operation serving 50 or more students, bar enrolment of students below 16 or those who have not finished secondary school, and require registration, with penalties of up to Rs 1,00,000 for non-compliance — rules that bear directly on a company now expanding a network of physical, franchise-run centres. Second, competition: Physics Wallah has built a lower-cost, high-volume test-prep business that directly targets the same JEE and NEET students Unacademy relies on, and industry coverage from outlets such as The Ken has described the resulting pricing pressure as a genuine threat to Unacademy’s test-prep margins. Third, execution risk in the franchise pivot itself: by handing day-to-day control of Unacademy Centres to local franchise operators from April 2026, the company trades direct oversight of quality and student outcomes — the thing its brand is built on — for a lighter cost base, a trade that coaching-centre chains in India have not always managed cleanly.

The takeaway

Unacademy’s history argues that user growth and revenue growth are not the same claim, and that investors and founders can spend years confusing one for the other. A platform can genuinely change how a generation studies for its exams — pull in millions of free viewers, then hundreds of thousands of paying subscribers, then a pandemic-sized surge in demand — and still not have found a business that earns more than it spends once the free capital runs out. The company’s own numbers make the point: three straight years of falling revenue alongside shrinking losses show that the eventual improvement came from spending less, not selling more. The lesson for any founder building on a demand spike is to ask, while the money is still cheap, exactly which parts of the growth are permanent customer behaviour and which are temporary conditions — because when conditions revert, only the durable part is left to be valued.

Frequently asked questions

What does Unacademy do?

Unacademy sells exam-preparation courses for competitive exams such as UPSC, JEE, NEET and CAT, delivered through live online classes, recorded video, test series and physical coaching centres, alongside a medical postgraduate prep platform, PrepLadder, and a course-hosting tool for other educators, Graphy.

Who founded Unacademy and when?

Gaurav Munjal started it as a YouTube channel in January 2015 while an engineering student in Mumbai. Hemesh Singh, his former Flatchat co-founder, and Roman Saini, a former AIIMS-qualifying doctor and IAS officer, joined him in December 2015 to build the Unacademy app.

What happened to Unacademy’s valuation?

Unacademy was reportedly valued at $3.44 billion in August 2021 (Bloomberg; Business Standard/PTI). It was acquired by upGrad in an all-stock deal that closed in September 2026 at a valuation of about $206 million, roughly 94% below its 2021 peak, as reported by TechCrunch.

Is Unacademy still an independent company?

No. As of September 2026, Unacademy is owned by upGrad following a completed all-stock acquisition. Co-founder Gaurav Munjal continues to lead Unacademy as CEO within the combined group.

How does Unacademy make money?

Mainly through paid subscriptions to live classes and test series (Unacademy Plus/Iconic and PrepLadder), coaching fees and franchise fees from its physical Unacademy Centres, and software fees from Graphy, its platform for independent educators.

Sources

Figures are as of September 2026. Currency converted at $1 ≈ ₹96.0 as of 18 September 2026 (Trading Economics).

• Entrackr, “Unacademy narrows down losses by 62% in FY24; revenue remains flat,” September 2024
• Entrackr, “Exclusive: Unacademy narrows EBITDA losses by 38% in FY25, reports Rs 826 Cr income,” September 2025
• Entrackr, “Unacademy posts Rs 1,044 Cr income in FY23; losses shrink 39%,” January 2024
• Inc42, “Unacademy’s FY23 Loss Falls 41% To INR 1,678 Cr, Posts INR 907 Cr Revenue,” January 2024
• Entrackr, “Unacademy to pivot from company operated centres to a franchise model,” January 2026
• The Arc, “Offline centres may deliver 50% of Unacademy’s revenue by 2024,” 2024
• TechCrunch, “India’s Unacademy sells to rival upGrad for $206M, about 94% less than its peak valuation,” September 2026
• YourStory, “upGrad wraps up Unacademy acquisition at $200M,” September 2026
• Bloomberg, “Unacademy Value Tops $3.4 Billion in Temasek-Led Funding Round,” August 2021
• Business Standard/PTI, “Unacademy raises $440 million in fresh funding at $3.44 billion valuation,” August 2021
• Bloomberg, “SoftBank Invests in India’s Unacademy at $1.45 Billion Valuation,” September 2020
• KrAsia, “SoftBank-backed Unacademy closes USD 440 million round, valuation shoots up 70% to USD 3.44 billion,” August 2021
• YourStory, “Edtech startup Unacademy sees significant spike in revenue, users in April 2020 amid coronavirus lockdown,” May 2020
• India TV News, “Why did Unacademy layoff 12% of the workforce?,” March 2023
• TechCrunch, “Indian edtech Unacademy cuts another 250 jobs,” July 2024
• Entrepreneur India, “Unacademy Co-Founder Hemesh Singh Steps Down as CTO, Moves to Advisory Role,” June 2024
• NewsBytes, “Unacademy CEO dismisses rumors of $800M acquisition by Allen Institute,” 2025
• Lawrbit, “Key Highlights of Guidelines for Regulation of Coaching Centers, 2024,” January 2024
• The Ken, “Physics Wallah’s bootstrapped challenge to Unacademy’s test-prep prowess,” 2024

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