Unacademy Ditches Offline Centres, Eyes Franchise Profitability Boost
Overview
Temasek-backed Unacademy is shutting down its company-operated offline centres and pivoting to a franchise model. Founder Gaurav Munjal confirmed the transition, aiming for an asset-light, capital-efficient structure by April. This move signals a return to Unacademy's online-first strategy to improve profitability amid a challenging edtech market.
Strategic Pivot to Franchise Model
Unacademy is phasing out its company-operated offline learning centres, converting them into franchise partnerships. Founder Gaurav Munjal announced the strategic shift via an internal email on January 14, targeting completion by April. The goal is to create an asset-light, capital-efficient business model that leverages local operators alongside Unacademy's core academics and technology.
Edtech Sector Headwinds
The move comes as edtech firms globally face pressure to prioritize profitability following a boom during the COVID-19 pandemic. Funding has diminished, forcing companies like Unacademy to re-evaluate growth strategies. This pivot signifies Unacademy's renewed focus on its digital roots, aligning with its online-first approach established in 2015.
Financial Turnaround Plan
Unacademy aims to achieve a healthier cost structure by April. The company reported a significant reduction in operational burn, targeting approximately ₹200 crore for CY2024. Several verticals, including UPSC, NEET PG, and CAT, have become contribution-margin positive. PrepLadder and Graphy achieved full-year cash-flow positivity, while Airlearn saw substantial Annual Recurring Revenue (ARR) growth.
Focus on Core Strengths
"Unacademy has always been exceptional at one thing: building great online learning products," Munjal stated, emphasizing a return to the company's core competency. The plan to hive off its AI language learning vertical, Airlearn, has been dropped, with founders Gaurav Munjal and Roman Saini continuing their roles. Sumit Jain remains CEO of the Test Prep vertical.
