Unacademy to exit company-run centres, pivot to franchise model after upGrad acquisition talks collapse

Gaurav Munjal, co-founder, Unacademy.

Edtech firm Unacademy will exit its company-operated offline centres and transition fully to a franchise-led model over the coming months, founder Gaurav Munjal told employees in an internal email, marking a significant shift in how the company runs its offline business.

The move comes weeks after months-long acquisition talks between Unacademy and upGrad fell through after the two sides failed to align on valuation and deal structure, as first reported by Moneycontrol. The collapse of the talks has left Unacademy to chart its next phase independently, even as it continues to restructure its business.

What did Gaurav Munjal say in the internal email?

In the email, reviewed by Moneycontrol, Munjal told employees that Unacademy will exit its company-operated offline centres by converting them into franchise partnerships, a model where local operators run day-to-day centre operations, while Unacademy continues to provide academics, technology, curriculum and brand reach.

“Over the coming months, we will exit our company operated centre business by converting them into franchise partnerships,” Munjal wrote, adding that the model had already shown it could work. He said the franchise structure allows Unacademy to remain asset-light and capital-efficient, while staying focused on what it does best — building scalable online learning products.

According to the email, the transition is expected to be completed by April, after which Unacademy would no longer operate offline centres directly. Munjal said the shift would result in one of the healthiest cost structures in the sector, as local franchise partners take on operational responsibilities while Unacademy concentrates on academics, technology and product development.

"Unacademy has always been exceptional at one thing: building great online learning products. So we are going back to our strengths. Unacademy will be an online first company moving forth. Like it was when we started in 2015," a company spokesperson told Moneycontrol in response to queries.

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How has Unacademy’s cost structure changed?

In the note, Munjal detailed the extent of Unacademy’s cost reset over the past year. The company cut its test-prep burn from about Rs 450 crore in CY2024 to roughly Rs 200 crore, a shift he attributed to shutting down underperforming initiatives and doubling down on what was working.

Which Unacademy businesses have turned profitable?

According to the email, several of Unacademy’s core verticals have turned contribution-margin positive. UPSC, NEET PG, CAT and multiple other test-prep businesses are now contribution-margin positive, while PrepLadder and Graphy were cash-flow positive for the full year. Language-learning platform Airlearn grew from around $200,000 in ARR at the start of 2025 to nearly $3 million by year-end, Munjal wrote.

What leadership changes has Unacademy seen recently?

The announcement follows a period of leadership transition at the Bengaluru-based edtech firm. Earlier this year, Munjal and co-founder Roman Saini stepped back from operational roles, and Unacademy appointed co-founder Sumit Jain as chief executive of its core test-prep business.

What is Unacademy’s current financial position?

Unacademy currently has around Rs 1,100 crore in cash on its balance sheet, Moneycontrol had reported earlier, and the company is expected to decide its next course of action in the coming days as it completes the transition away from company-run centres.

What does Munjal see ahead for Unacademy?

In the email, Munjal told employees that CY2026 would be about growth, not survival, after several years of cost correction and work on unit economics. “We know what we are good at. We know where we are going. And now, with the right structure in place, we get to do what builders love most: grow,” he wrote.