Unacademy to pivot from company operated centres to a franchise model

Edtech unicorn Unacademy is recalibrating its business with a sharper focus on profitable growth after a year of significant cost correction, according to an internal email sent by co-founder and CEO Gaurav Munjal to employees.

In the communication, Munjal said that Unacademy reduced its test prep burn to around Rs 200 crore in calendar year 2024 from nearly Rs 450 crore earlier. The reduction followed a series of operational changes including shutting down underperforming initiatives and prioritising core businesses. He added that several major exam preparation verticals such as UPSC, NEET PG and CAT have turned contribution margin positive.

Munjal further added that PrepLadder and Graphy were cash flow positive for the full year. Meanwhile, language learning platform Airlearn scaled its annual recurring revenue from about $200,000 at the start of 2025 to nearly $3 million by the end of the year.

As part of its restructuring, Unacademy plans to exit its company operated offline centre business over the coming months by converting these centres into franchise partnerships. According to Munjal, the franchise model allows local operators to manage operations while Unacademy provides academics, technology and reach. He said the transition is expected to be completed by April, after which the company will have a significantly leaner cost structure.

The internal email comes shortly after the acquisition talks between Unacademy and upGrad were called off due to valuation differences. The discussions had been underway for several months amid a broader slowdown in edtech deal activity and valuation resets across the startup ecosystem. upGrad co-founder Ronnie Screwvala later confirmed that the deal did not materialise.

Munjal said the calendar year 2026 would be focused on growth rather than survival, with improving unit economics across online test prep and faster than expected growth in Airlearn. He added that Unacademy is now positioned to scale with greater financial discipline.