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Unacademy to pivot from company operated centres to a franchise model

EntrackrEntrackr · 2m ago
Unacademy to pivot from company operated centres to a franchise model
Medial

Unacademy to pivot from company operated centres to a franchise model Unacademy's Gaurav Munjal added that several major exam preparation verticals such as UPSC, NEET PG and CAT have turned contribution margin positive. 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.

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upGrad set to acquire Unacademy in deal with break fee clause

EntrackrEntrackr · 23h ago
upGrad set to acquire Unacademy in deal with break fee clause
Medial

Online higher education platform upGrad has signed a term sheet to acquire edtech firm Unacademy in an all-stock transaction. The firms will not disclose the valuation until the deal is completed and formally filed. The term sheet was signed after earlier talks between the two companies collapsed in January due to differences over valuation. Announcing the development, upGrad co-founder Ronnie Screwvala said the deal will be structured as a share swap and includes a break fee if the transaction does not close. Importantly, Unacademy’s co-founder and chief executive Gaurav Munjal will continue to lead the company and focus on building online learning products. Screwvala stated, “We at upGrad have signed a term sheet to acquire Unacademy in an all-stock deal, with founder and CEO Gaurav Munjal staying on to build Unacademy and focus on creating online education products that learners love.” He added that the combined entity could benefit from Unacademy’s product capabilities and upGrad’s broader learning ecosystem. According to Screwvala, upGrad’s integrated model spanning segments from K12 to lifelong learning could gain further momentum if the transaction closes. Munjal confirmed the development and said the proposed acquisition will be executed through a 100% share swap deal. Highlighting Unacademy’s recent changes, Munjal said the company has spent the past year restructuring parts of the business. “We consolidated company-operated centres with franchise partners so we could refocus on building great online education products,” he said. The company also completed a Rs 50 crore ESOP buyback, with nearly 40% of former employees participating, Munjal said. He added that Unacademy currently has more than $100 million in cash reserves. On the financial side, Unacademy reported a 16% year-on-year decline in revenue to Rs 826.3 crore in FY25 from Rs 988 crore in FY24. However, the SoftBank-backed firm reduced its EBITDA loss by 38% to Rs 305 crore and cut its net loss by 31% to Rs 436 crore.

Unacademy announces Rs 50 Cr ESOP buyback

EntrackrEntrackr · 17d ago
Unacademy announces Rs 50 Cr ESOP buyback
Medial

Edtech company Unacademy has initiated a Rs 50 crore ESOP buyback programme to offer liquidity to its employees, according to the company’s co-founder, Gaurav Munjal. Announcing the development on X, Munjal said that eight employees are expected to make over Rs 1 crore each through the buyback, while 17 employees will receive more than Rs 50 lakh, and 38 employees are likely to earn over Rs 10 lakh. “Grateful to the board for carving out a cash pool for the employees, even though the valuation is significantly lower than our last fundraise,” Munjal said, adding that the company will reach out to eligible employees over the next few weeks to participate in the programme. Munjal had recently clarified the company’s stance on ESOP exercise terms and valuation. Unacademy introduced a one-time 30-day window for former employees to exercise their vested stock options, while cautioning that the current valuation is lower than previous funding rounds and that preference shareholders have priority over equity holders. Unacademy is undergoing a strategic reset as the edtech sector faces headwinds after the post-pandemic boom. Recently, the company announced plans to shift from company-run offline learning centres to a franchise-based model to cut costs and improve unit economics. The company has also explored consolidation opportunities. However, recent talks between Unacademy and upGrad over a potential acquisition were called off after the two sides failed to agree on valuation terms.

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