Unacademy Announces Major Business Restructuring
Unacademy, the Temasek-backed education technology company, is making a significant strategic shift. Founder and CEO Gaurav Munjal informed employees on January 14 that the company will exit its offline center business entirely. This move represents a fundamental change in the company's operational approach.
Transition to Franchise Partnerships
In an email to staff members, Munjal outlined the company's new direction. "Over the coming months, we will exit our company-operated centre business by converting them into franchise partnerships," he stated clearly. The company has already reviewed this communication internally.
Munjal explained the reasoning behind this strategic pivot. He emphasized that the franchise model has demonstrated effectiveness with local operators handling daily operations while Unacademy provides academic content, technological infrastructure, and brand reach. This approach allows the company to maintain quality while reducing operational burdens.
Focus on Financial Health and Core Competencies
The founder highlighted several advantages of this new structure. "It is asset-light, capital-efficient, and aligned with who we are," Munjal noted in his communication. He projected that by April, when the transition completes, Unacademy will achieve one of the healthiest cost structures within the education technology sector.
This strategic shift follows broader industry trends. Edtech companies have spent the past five years prioritizing profitability as funding availability decreased. After the COVID-driven online learning surge subsided around 2022, Unacademy had expanded into physical centers to sustain growth. The current move signals a deliberate return to the company's original strengths.
Reaffirming Online-First Philosophy
A company spokesperson confirmed this renewed focus. "Unacademy will be an online-first company moving forward. Like it was when we started in 2015," the representative stated in response to media inquiries. This declaration reinforces the company's commitment to digital education delivery.
Leadership Continuity and Strategic Decisions
In related developments, Unacademy has decided against hiving off Airlearn, its artificial intelligence language learning vertical. Sources familiar with the matter indicate that both founders, Gaurav Munjal and Roman Saini, will continue with the company. The previously considered separation of Airlearn has been abandoned.
Sumit Jain will maintain his position as CEO of the test preparation vertical. This business segment includes multiple components such as Unacademy, PrepLadder, franchise operations, and other educational services. Jain's continued leadership ensures stability in this important division.
Financial Performance and Growth Outlook
Munjal's email revealed encouraging financial developments. The company has substantially reduced its operational burn, cutting it to approximately ₹200 crore during calendar year 2024. Several educational verticals have achieved profitability milestones.
The CEO reported specific successes:
- UPSC, NEET PG, CAT and multiple other verticals turned contribution-margin positive
- PrepLadder and Graphy maintained cash-flow positivity throughout the entire year
- Airlearn experienced remarkable growth, expanding from around $200,000 annual recurring revenue at 2025's beginning to nearly $3 million by year's end
Munjal expressed optimism about the company's trajectory. "CY2026 is not about survival; it is about growth," he declared confidently. The founder emphasized Unacademy's historical strength in creating exceptional online learning products. When executed effectively at scale, these products deliver solid business economics and meaningful educational impact.
Industry Context and Market Position
This restructuring occurs against a backdrop of industry consolidation attempts. A potential acquisition by upGrad, which could have represented one of India's largest edtech mergers, recently collapsed. Multiple discussions about Unacademy's sale have faltered over the past two years as valuation expectations encountered market realities.
Last November, upGrad proposed a share-swap arrangement that would have valued Unacademy between $300 and $400 million. This figure represents a substantial decline from the company's peak valuation of $3.4 billion during 2021's funding boom. Since its inception, Unacademy has raised approximately $880 million from prominent investors including SoftBank, Temasek, Tiger Global, Sequoia Capital, and Peak XV Partners.
The company's strategic refocusing demonstrates adaptability in a challenging market environment. By returning to its online education roots while implementing a capital-efficient franchise model for physical presence, Unacademy positions itself for sustainable growth in India's competitive education technology landscape.
