The Competition Commission of India (CCI) has granted approval for the acquisition of certain share packages in Unacademy's parent company, Sorting Hat Technologies Private Limited, as well as the subsequent merger of Sorting Hat with upGrad Education.
This decision removes a significant regulatory hurdle for one of the largest consolidation processes in India's edtech sector. This sector is undergoing a transformation following the funding boom observed during the pandemic, as companies are now focusing more on profitability rather than just rapid growth.
In a brief order released on Tuesday, the competition watchdog noted that a more detailed document will follow. The approval marks the final stage of the transaction, which first emerged in May when upGrad and Unacademy sought CCI clearance for the proposed merger.
The deal was structured as a share exchange, with Unacademy expected to join the upGrad group, led by Ronnie Screwvala, while maintaining operational continuity under existing management. This transaction reflects a significant departure from Unacademy's peak valuation during the pandemic funding cycle.
Founded in 2015, Unacademy rapidly expanded due to the surge in demand for online learning during the pandemic. The Bengaluru-based company established a large presence in competitive exam preparation and other entrance and aptitude tests, expanding through acquisitions such as PrepLadder and Graphy.
However, like many of its peers, Unacademy later faced a more complex operating environment due to the return to in-person learning, increased difficulty in attracting funding, and a shift in investor focus towards sustainable growth and reduced cash burn.
Meanwhile, upGrad has focused its efforts primarily on higher education, university partnerships, and professional upskilling, serving students aiming for career advancement. The proposed acquisition expands upGrad's presence in the test preparation segment and adds another major educational brand to its portfolio.
The deal also coincides with personnel changes in both companies. In May, upGrad appointed Mukesh Mundra as its new Chief Financial Officer. Mundra, previously associated with JioStar and earlier Viacom18, joined the company ahead of the regulatory process related to the Unacademy transaction and its broader growth plans.
At Unacademy, co-founder Sumit Jain, who headed the test preparation business as CEO, stepped down from his full operational role in May. According to internal communications, Jain will continue to collaborate with the company in an advisory capacity, while co-founder and CEO Gaurav Mundjal will resume direct oversight.
The transaction occurs as the Indian EdTech industry enters a more mature phase. Companies are increasingly combining online learning with physical learning centers, utilizing artificial intelligence to personalize education and improve student support, while placing greater emphasis on profitability over rapid expansion.
The sector is also showing continued consolidation as companies strive for scale, a broader course offering, and operational efficiency amid more disciplined financing.
