'Focus on growth rather than survival': Unacademy to shift from company-run centres to a franchise model

Bengaluru-based edtech firm Unacademy plans to shift from its its company-operated offline centres to a franchise model, as it sharpens its focus on a more capital-efficient operating model.

The shift is expected to be completed by April this year, Moneycontrol reported, citing an internal email sent to employees by co-founder Gaurav Munjal.

The report comes days after acquisition talks with upGrad fell through, following differences over valuation. Unacademy had been seeking a valuation of around $300 million to $400 million for the proposed transaction.

Prior to the upGrad discussions, the SoftBank-backed startup had also explored potential acquisitions involving K-12 Techno Services and recently listed PhysicsWallah, but those talks did not materialise.

In his email, Munjal said the franchise model would allow Unacademy to operate in an asset-light and capital-efficient manner, with local partners managing day-to-day operations while the company focuses on academics, technology and distribution.

“The franchise model has already shown that it works: great local operators run operations, and we provide the academics, technology and reach. It is asset-light, capital-efficient, and aligned with who we are,” he wrote.

Munjal added that once the transition is complete, Unacademy expects to have one of the healthiest cost structures in the sector.

Alongside the offline exit, Unacademy plans to double down on its core online business. A company spokesperson said the platform would be “online-first” going forward, returning to the model it started with in 2015. Munjal told employees that the company’s online learning products have scaled with improving unit economics and impact.

According to the internal communication, Unacademy’s UPSC, NEET PG, CAT and several other verticals turned contribution-margin positive in calendar year 2025. PrepLadder and Graphy were cash-flow positive for the full year, while Airlearn, its language learning platform, grew from about $200,000 in annual revenue run rate at the start of 2025 to nearly $3 million by the end of the year.

Munjal also highlighted a sharp reduction in cash burn. In a social media post in December, he said Unacademy had cut its burn to below Rs 175 crore in 2025 from about Rs 1,400 crore in 2022.

In his latest email, he said burn for calendar year 2025 stood at around Rs 200 crore, down from over Rs 450 crore in 2024. The company’s top line touched about Rs 600 crore in 2025, with profitability in sight and what he described as a healthy balance sheet.

Addressing employees after the collapse of the upGrad deal, Munjal said the current year would be focused on growth rather than survival. He said Unacademy now has a scaled online business that is profitable at the vertical level, alongside a global product in Airlearn that is growing faster than expected.