Softbank-backed edtech startup Unacademy has held extended discussions with offline test preparation centre Allen Career Institute for a potential sale that could value the edtech firm at $800 million, or less than a quarter of its peak valuation of $3.4 billion, The Economic Times reported on Wednesday, citing people in the know.
The report added that the talks, which have been ongoing for a few months, hinge on final approval from Allen’s promoters, the Maheshwari family.
The deal talks surface months after Entrackr reported that Unacademy is in talks to merge with K12 Techno, which runs the chain of Orchids International Schools.
Unacademy, once the second most valued edtech startup after BYJU’S, has been struggling to raise funds. The startup last raised $440 million led by Singapore’s state investor Temasek Holdings at a valuation of $3.44 billion in August 2021.
Founded in 2015 by Gaurav Munjal, Hemesh Singh, and Roman Saini, Unacademy reportedly claimed it was close to touching profitability in April. However, it has yet to turn profitable.
The Indian edtech sector, which looked promising and witnessed massive growth during COVID-19, has now been hit by the double whammy of a funding winter and rising costs amid waning demand for online education.
Among the worst hit is Byju Raveendran-led BYJU’S, which once boasted a $22-billion valuation but has lately been under scrutiny for a host of issues. This has led to its shareholders pushing for significant changes, including the ouster of Raveendran. Compounding the turmoil, the company has witnessed the resignation of its auditor, Deloitte, and several board members.
