Allen Plans to Acquire Unacademy in a Billion-Dollar Deal

In a major development in the Indian edtech industry, Allen Career Institute is in advanced talks to acquire Unacademy, a popular online learning platform. This potential deal, valued at a significant $800 million, marks a significant drop from Unacademy's peak valuation of $3.4 billion in 2021.

The negotiations between the two companies have been ongoing for several months and are currently awaiting the approval of Allen's promoters, the Maheshwari family. Investment banks are actively working on determining the share swap ratio, which will define the exchange of shares between the two companies. Additionally, the deal may involve cash payouts for Unacademy's founders and early investors.

If the acquisition is finalized, it will be one of the largest mergers in India's edtech sector. The $800 million valuation takes into account Unacademy's substantial cash reserves of $160 million. The deal is being spearheaded by Bodhi Tree, an investor in Allen, and Gaurav Munjal, one of Unacademy's co-founders.

Following the completion of the merger, Unacademy's co-founders, Gaurav Munjal, Roman Saini, and Sumit Jain, are expected to step down from their roles. This news comes after the departure of CTO Hemesh Singh earlier this year. Unacademy has been implementing cost-cutting measures, including layoffs and executive departures, as part of its ongoing restructuring efforts.