From $3.4 Billion, to $800 Million, to $300 Million. What is Unacademy's true market value?

So Unacademy is now looking at getting acquired by UpGrad at a valuation of $300-400 Million. That's when it has raised over $850M over the course of a decade.

That's interesting. But what's even more interesting is that the company was valued at $3.4B just 4 years ago, and it still has ~$130M in cash. Which means its core business is being valued at $170-270M only.

Now this might look like a steep fall. But I think Team UpGrad could still negotiate better.

To cut the long story, Unacademy is (and has always been) a cash guzzler on steroids. And while a loss making company could still be valuable due to its growth aspects, forget about growth, Unacademy is actually degrowing. Look at its revenue/loss numbers by FYs and in Crores.

2025: ₹826 / ₹436

2024: ₹988 / ₹631

2023: ₹1044 / ₹1678

2022: ₹719 / ₹2848

2021: ₹398 / ₹1537

Please note is that a significant part of the later years' earnings is the interest on cash deposits. Like in FY23, UA earned ₹137 Cr from it. So the actual business is even deeper in red, but it's the FDs that are improving the hue. It's sad.

The point is while the losses have stayed, the revenue is falling. And consistently. On what basis is Unacademy's business getting valued at $170-270M? It's a business with sales of ~$90M, and losses of ~$50M. There are no earnings to calculate a "PE ratio", but a revenue multiple of 2-3x? That's for healthy companies in this space. And Unacademy is certainly not a healthy company.

Take NIIT for example. It has two divisions in the skills and careers industry. Not exactly Unacademy's turf, but arguably greener pastures. The bigger one did revenues of $188M with a PAT of $28M in FY25. And what about its market cap? $512M. The company is profitable, growing, has cash, and healthy options for the future. And then it's getting a revenue multiple of 2.7x from the market. But Unacademy, which has never even smelled money from a distance, will get the same? Aise kaise, bhai? Aur kyun?

While the VCs who once valued Unacademy at $3.4B won't still be in green even if this deal went through, I think the fact that it's even getting considered at this price is just beautiful. For Unacademy, of course. Not for UpGrad. (Unless it all happens in a share swap where UpGrad beefs up its own valuation, and then goes public).

A good question is, what would be the fair valuation of Unacademy?

If you remember, just last year when the same conversation was happening between Unacademy and Allen, $800M was the valuation ask. 12 months on, it's come down to $300-400M. The cash reserves are declining (from $160M to $130M), revenues are declining, losses are intact, and the space is getting tougher every day. In truth, Unacademy's business isn't worth more than $90M. And that's when the buyer is having a really great hair day.

So unless it's pre-IPO financial engineering, UpGrad can just delay the talk by a few months and bring down the fair valuation of Unacademy to - a song.

Will it? Let's see.

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