Unacademy Plans Exit from Offline Centres, Adopts Franchise Model

According to creator Gaurav Munjal, Unacademy intends to close its centre business and turn it into a franchise. Munjal informed staff members via email on January 14 that the company will convert its company-operated centres into franchise partnerships in the upcoming months.

He went on to say that the business's franchising model has demonstrated that it collaborates with regional operators, manages operations, and leverages Unacademy's technology, reach, and academics. It is capital-efficient, asset-light, and consistent with the brand's identity, he continued. When this transformation is finished in April, Unacademy will have one of the most robust cost structures in the industry.

Why Unacademy is Shifting its Operation Models?

The change follows edtech companies' five-year focus on profitability and growth restraint as funding dried up. In order to maintain expansion, Unacademy moved into offline centres as the COVID-19 pandemic-driven online learning surge faded. The most recent action demonstrates the company's renewed determination to concentrate on digital operations and go back to its online-first strategy. For more than a year, Unacademy's founders, Gaurav Munjal and Roman Saini, have been considering methods to capitalise on Airlearn. Airlearn is the firm's rapidly expanding AI language learning vertical.

According to Mint, the plans to split up Airlearn have been abandoned, and Munjal and Saini will both stay with the company. The CEO of the vertical will remain Sumit Jain, who previously oversaw Unacademy as an offline exam preparation company. Test prep still includes a lot of verticals, including Unacademy, PrepLadder, franchisees, and other companies, so nothing has changed. According to the article, Munjal will continue to be the Group CEO, while Jain will continue to be the CEO of Test Prep.

Unacademy Going Through Troubled Waters

Over the previous two years, a number of discussions regarding Unacademy's sale have fallen through, including those with other edtech companies. The reason behind the decline is the valuation estimates that did not match market realities.

Unacademy's share-swap agreement, which upGrad suggested in November of last year, was predicted to value the company between $300 and $400 million. The valuation is a significant decrease from its $3.4 billion valuation during the 2021 financing boom. Since its founding, Unacademy has raised over $880 million with the support of SoftBank, Temasek, Tiger Global, Sequoia Capital, and Peak XV Partners.

Munjal stated in the email that the business intends to resume its focus on growth following a lengthy period of burn reduction, bringing its burn in CY 2024 down to about INR 200 crore. The company witnessed several verticals earn a profit, he continued. Contribution margin turned positive for UPSC, NEET PG, CAT, and several other verticals. For the entire year, PrepLadder and Graphy had positive cash flow. By year's end, Airlearn had grown from about $200K ARR in the beginning of 2025 to about $3M ARR.