Allen Career Institute, a leading offline coaching network from Kota, Rajasthan, is reportedly negotiating to acquire Unacademy, an edtech startup based in Bengaluru. The deal could value Unacademy at $800 million, a sharp decline from its peak valuation of $3.4 billion.
The negotiations, ongoing for months, are nearing completion, pending approval from Allen’s promoters. Key aspects of the discussions involve the share swap ratio and cash payouts for Unacademy’s founders and investors. Central to finalizing the deal is the involvement of the Maheshwari brothers, crucial for merging the two companies.
This potential acquisition comes amid a challenging period for India’s edtech sector, with companies like Unacademy transitioning to offline formats and Allen grappling with declining revenues in its traditional coaching model. A merger could create a powerful education entity by combining Allen’s established offline presence with Unacademy’s digital expertise.
The deal also faces valuation disputes, particularly regarding Unacademy’s $160 million in cash reserves. If successful, Unacademy’s co-founders, including CEO Gaurav Munjal, are expected to step down, following the company’s recent struggles with profitability and cost-cutting measures.
