Gaurav Munjal Pauses New Start-Up to Lead Unacademy After upGrad Deal Fails

Months of acquisition talks between edtech major Unacademy and higher-education company upGrad have collapsed after the two sides failed to agree on valuation and deal structure. The breakdown has created uncertainty around the future plans of Unacademy co-founders Gaurav Munjal and Roman Saini.

As a result, a proposed funding round to back a separate startup by the founders has reportedly been put on hold and Munjal has decided to remain actively involved in running Unacademy, MoneyControl reported.

The negotiations were reportedly centred on an all-stock transaction that would have valued Unacademy at around $300–$400 million, a steep decline from its pandemic-era private valuation of roughly $3.4 billion. upGrad founder Ronnie Screwvala confirmed to The Financial Express that the talks did not proceed due to valuation differences, saying the two sides were unable to agree on mutually acceptable terms.

Founders’ Spin-Out

Munjal and Saini had been exploring plans to spin off the language-learning app AirLearn as an independent business that they would lead. Separately, Munjal was in discussions to raise about $17 million from investors including Peak XV Partners and Blume Ventures, along with several well-known founders, to seed a new venture. Those conversations are now on hold as Unacademy reassesses its strategic direction following the collapse of the deal.

The failed sale comes amid significant internal restructuring at Unacademy earlier this year. Munjal and Saini had stepped back from day-to-day operations, with co-founder Sumit Jain appointed chief executive of the core test-prep business. Company insiders said Unacademy holds around ₹1,100 crore in cash, giving the board a substantial buffer as it evaluates options ranging from continuing as a standalone company to pursuing fresh merger or acquisition opportunities.

Employee Equity & ESOPs

The episode has also revived long-standing concerns around employee stock ownership and liquidity. Sharp drops in private valuations often mean liquidation preferences and cap-table structures leave ESOP holders with little or no value. Unacademy’s leadership had previously allowed some former employees to exercise vested options so they could participate in any future stock-based outcomes, but it remains unclear whether similar measures will be reconsidered now.

Industry executives say the breakdown reflects a broader correction underway in India’s edtech sector. Companies that saw inflated valuations during the 2020–21 funding boom have been forced to reset growth expectations as funding slows and unit economics tighten. This recalibration has led to founder exits and new venture launches across the sector. While upGrad has continued to pursue acquisitions and selective expansion, other senior edtech leaders have left to build startups focused on niche areas such as overseas education and skills marketplaces.

Leadership Churn & Founder Exits

Unacademy is not alone in seeing senior leadership churn. Across the edtech industry, several prominent founders and executives have moved on in recent months. These include upGrad co-founder Mayank Kumar, who left to start a healthcare worker placement business, and former Adda247 co-founder Chandan Singh, who is now building a startup in stealth mode. Other founders have similarly stepped back from operating roles to incubate new ventures.

At Unacademy, the transition to Sumit Jain’s operational leadership of the test-prep business was part of a broader effort to reduce cash burn and sharpen the company’s focus on its core revenue streams.