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Unacademy to pivot from company operated centres to a franchise model

EntrackrEntrackr · 3d 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.

Unacademy slashes core biz cash burn to Rs 200 Cr in 2025: Gaurav Munjal

EntrackrEntrackr · 9m ago
Unacademy slashes core biz cash burn to Rs 200 Cr in 2025: Gaurav Munjal
Medial

Unacademy slashes core biz cash burn to Rs 200 Cr in 2025: Gaurav Munjal Unacademy CEO Gaurav Munjal has shared an update on the company’s financial and operational performance. According to Munjal, Unacademy has reduced its cash burn in the core business from over Rs 1,000 crore annually three years ago to under Rs 200 crore this calendar year. This is about half of what the company spent last year. In a thread on social media platform X, Munjal said the company currently has Rs 1,200 crore in the bank and is in a “default alive” state. He added that some of Unacademy’s businesses, including Graphy and PrepLadder, are generating cash on a monthly basis. For context, the SoftBank-backed edtech unicorn cut its losses by 62% to Rs 631 crore in FY24, while its revenue remained flat during the period. Reflecting on past decisions, Munjal said edtech companies that grow through multiple acquisitions are unlikely to succeed in the current market. He said Unacademy had made this mistake earlier and is now focusing on profitability without getting distracted by external developments. On the offline front, Munjal said that around 70% of Unacademy’s centers are expected to be profitable at the center level this year. These centers are showing outcomes in exam categories such as JEE, NEET, and UPSC. He also pointed to Airlearn as the fastest-growing product within the group. Airlearn has recorded nearly 70,000 daily active users and $2 million in annual recurring revenue over the last 12 months. Munjal outlined three focus areas for the company: making the core business profitable, building tech products such as Airlearn and Graphy, and staying focused on internal goals instead of market noise.

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