Allen Career Institute Eyes $800 Million Deal to Acquire Unacademy

Allen Career Institute is reportedly in advanced discussions to acquire Unacademy, a leading Indian edtech platform, for $800 million. As per reported by Indiatoday.

This valuation includes $160 million from Unacademy’s cash reserves, reflecting a significant drop from its peak valuation of $3.4 billion in 2021.

The potential acquisition has been under negotiation for several months and awaits approval from the Maheshwari family, promoters of Allen, which is a well-established name in India’s test preparation sector. 

Investment banks are currently determining the share swap ratio, which will dictate the number of Allen shares that Unacademy shareholders will receive in exchange for their holdings. The deal may also include cash payouts for Unacademy’s founders and early investors.

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Leadership Transition and Potential Exit of Unacademy Founders

Bodhi Tree, an investor in Allen, and Gaurav Munjal, Unacademy’s co-founder, are leading the discussions. If the deal is finalized, Unacademy’s founding team, including CEO Gaurav Munjal, Roman Saini, and Sumit Jain, are likely to exit the company. Earlier this year Unacademy’s Chief Technology Officer Hemesh Singh also departed, signaling a leadership transition.

The acquisition comes as Unacademy faces financial difficulties, including cost-cutting measures and employee layoffs. In July 2024, the company laid off 250 employees as part of its restructuring efforts. 

Reports of internal dissatisfaction emerged after Gaurav Munjal announced in a virtual town hall that employees would not receive appraisals due to underwhelming growth targets. This announcement delivered while Munjal wore a $400 Burberry T-shirt sparked online criticism for perceived insensitivity.

If completed this acquisition would mark one of the largest consolidations in India’s edtech sector underscoring the financial challenges faced by many companies in the industry amidst heightened scrutiny and competition.

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