Unacademy Transitions to Franchise Model to Boost Growth and Efficiency

How Unacademy is Going Asset-Light to Strengthen Its EdTech Business

Bengaluru-based edtech giant Unacademy is pivoting from company-operated offline centres to a franchise model, aiming for a more capital-efficient and scalable approach. The transition is set to be completed by April 2026, signaling a major strategic shift for the SoftBank-backed startup.

Why the Change? Acquisition Talks Collapse and Strategic Realignment

Unacademy’s decision comes shortly after the collapse of acquisition talks with upGrad, which fell through over valuation disagreements. The edtech firm had reportedly been seeking a $300–400 million valuation. Prior to this, Unacademy explored potential acquisitions with K-12 Techno Services and PhysicsWallah, but none materialized.

In an internal email to employees, co-founder Gaurav Munjal explained that the franchise model will enable Unacademy to operate in an asset-light and capital-efficient manner, allowing local partners to manage day-to-day operations while the company focuses on academics, technology, and distribution.

Asset-Light Franchise Model: How It Works

Munjal emphasized that the franchise approach has already demonstrated success, where local operators handle operations, and Unacademy provides curriculum, tech support, and reach. This model reduces overhead, improves unit economics, and aligns with the company’s vision for sustainable growth.

“Great local operators run operations, and we provide the academics, technology, and reach. It is asset-light, capital-efficient, and aligned with who we are,” Munjal wrote.

Once fully operational, this model is expected to create one of the healthiest cost structures in the sector, giving Unacademy a competitive edge in the Indian EdTech market.

Doubling Down on Online Learning

Alongside the franchise transition, Unacademy is reinforcing its online-first approach, returning to the model that launched its success in 2015. Munjal highlighted that several of Unacademy’s verticals—including UPSC, NEET PG, and CAT preparation—turned contribution-margin positive in 2025.

Other platforms under Unacademy’s umbrella, such as PrepLadder and Graphy, were fully cash-flow positive, while Airlearn, the language learning platform, grew from $200,000 annual revenue to nearly $3 million by year-end 2025.

Improved Financial Health and Reduced Cash Burn

Unacademy has significantly reduced cash burn over the past three years:

• 2022: ~Rs 1,400 crore

• 2024: ~Rs 450 crore

• 2025: ~Rs 200 crore

The company’s top line touched Rs 600 crore in 2025, with profitability now in sight and a healthy balance sheet. Munjal stated that the focus for 2026 is growth rather than survival, leveraging a scaled online business with vertical-level profitability and global product expansion.

The Road Ahead: Sustainable Growth for India’s EdTech Leader

With a franchise-led offline expansion, strong online platforms, and improved financials, Unacademy aims to solidify its position as one of India’s leading EdTech startups. The shift reflects a strategic balance of growth, efficiency, and sustainability in a competitive sector where scaling efficiently is critical.

FAQs

1. Why is Unacademy shifting to a franchise model?
   To operate in a capital-efficient, asset-light manner and allow local partners to manage offline centres while focusing on academics and technology.

2. When will the franchise transition be completed?
   The transition is expected to be completed by April 2026.

3. What caused the collapse of the upGrad acquisition talks?
   The deal fell through due to disagreements over the valuation, which Unacademy estimated at $300–400 million.

4. Which verticals of Unacademy are profitable?
   UPSC, NEET PG, CAT, PrepLadder, Graphy, and Airlearn have reported positive contribution margins and cash-flow positivity.

5. How has Unacademy reduced its cash burn?
   Through cost optimization, focus on asset-light operations, and scaling online platforms efficiently.

6. Is Unacademy still investing in offline centres?
   Yes, but under a franchise model rather than company-operated centres.

7. What is the focus for Unacademy in 2026?
   The company aims to prioritize growth rather than survival, leveraging its scalable online business.

8. What benefits does the franchise model provide?
   It allows local operators to manage day-to-day operations, reduces overhead costs, and improves unit economics.

9. Will Unacademy continue to expand online?
   Yes, the company is doubling down on its online-first model while maintaining profitable offline partnerships.

10. How has Airlearn performed under Unacademy?
    Airlearn’s revenue grew from $200,000 to nearly $3 million in 2025, exceeding growth expectations.