Unacademy is reportedly negotiating a sale to legacy JEE coaching giant Allen at a valuation of $800 million, as per ET.
Context: while still significant, the deal tag marks a sharp decline from Unacademy’s peak valuation of $3.4 billion, underscoring the struggles of the ed-tech industry. The deal awaits approval from Allen’s promoters, the Maheshwari family, though most stakeholders are said to be on board.
Backdrop: the ed-tech sector is facing major headwinds, as AI-driven tools and free content on platforms like YouTube have eroded the market for paid, gated education platforms. We’ve seen even heavyweights like Byju’s struggle.
The deal: Unacademy already shifted to an offline model after nearly a decade online. However, growth has plateaued. On the other hand, Allen, rooted in its offline coaching model, has struggled to gain traction in the digital space. A merger could be mutually beneficial.
- Unacademy has $160 million in cash reserves, and ongoing talks reportedly involve discussions about share swap ratio
Big picture: the decline of digital-only ed-tech has been a worldwide phenomenon. Just ask yesteryear leaders like Coursera or Chegg.
