Indian education technology company upGrad has agreed to acquire competitor Unacademy in a share-swap deal, marking a significant consolidation move in the country's struggling edtech sector.

The acquisition comes as Unacademy's valuation has declined dramatically from a peak of $3.5 billion to under $500 million, reflecting broader challenges facing India's once-booming online education industry.

The transaction will be structured as a share-swap arrangement, though specific financial terms of the deal were not disclosed. The acquisition represents one of the most significant consolidation moves in India's edtech space as companies seek to weather market downturns through mergers.

India's edtech sector, which experienced rapid growth during the COVID-19 pandemic as students shifted to online learning, has faced mounting pressures as in-person education resumed and investor sentiment cooled. Many companies in the space have seen their valuations compressed and have been forced to reduce operations or seek strategic partnerships.

Both Unacademy and upGrad operate online learning platforms targeting various educational segments, from test preparation to professional skills development. The combined entity is expected to have a stronger market position as the sector continues to face headwinds.