SoftBank-backed edtech firm Unacademy will shut down all its company-operated offline coaching centres and convert them into franchise partnerships by April, co-founder and chief executive Gaurav Munjal told employees in an internal communication, on Wednesday, reviewed by Financial Express.
The move marks a complete exit from the asset-heavy offline model, as the firm doubles down on its core online test preparation and language learning businesses.
Reducing Operational Cash Burn
“Over the coming months, we will exit our company operated centre business by converting them into franchise partnerships,” Munjal wrote. “The franchise model has already shown that it works: 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.”
“By April, when this transition is complete, Unacademy will have one of the healthiest cost structures in the sector,” he added.
Unacademy currently operates 26 company-owned coaching centres alongside 35 franchise centres. The transition would shift all physical operations to local franchise partners while the company focuses on providing content, technology and brand support. According to sources, the offline business currently accounts for around 80% of the edtech company’s cash burn.
Overall company cash burn had come down to Rs 150 crore in 2025, they added.
The announcement comes days after FE reported that Munjal would continue leading the company as Group CEO with a renewed focus on online businesses, following the collapse of acquisition talks with Ronnie Screwvala-led upGrad over valuation differences.
As part of that proposed all-stock transaction, which valued Unacademy at approximately $300 million, Munjal and co-founder Roman Saini had been planning to exit operational roles.
Path to Profitability
In the email, Munjal outlined significant progress on cost reduction and profitability. The company’s test preparation business burn fell from around Rs 450 crore to roughly Rs 200 crore in calendar year 2024, he said.
Multiple verticals including UPSC, NEET PG and CAT preparation have turned contribution-margin positive, while PrepLadder (medical entrance exam prep) and Graphy (creator-led platform) achieved full-year cash flow positivity.
Airlearn, the company’s recently launched language learning app that competes with Duolingo, has emerged as a key growth driver. The platform’s annual recurring revenue grew from approximately $200,000 at the start of 2025 to nearly $3 million by year-end, according to the email.
“CY 2026 is not about survival. It is about growth,” Munjal wrote. “After several years of doing the hard, unglamorous work of cost correction and unit economics, we now have something rare in this market: a scaled online business that is profitable at the vertical level, and a global product that is growing faster than we expected.”
“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 said in response to FE’s query.
The Bengaluru-based company reported revenue of Rs 826 crore in FY25, down 16% from Rs 988 crore in the previous year. Net losses narrowed to Rs 435 crore from Rs 631 crore in FY24, according to Tracxn. The company holds approximately Rs 1,070 crore in cash reserves, sources said.
Founded in 2015, Unacademy has raised over $880 million from investors including SoftBank, Temasek, General Atlantic and Tiger Global. The company was valued at $3.4 billion at its peak in 2021, though Munjal acknowledged late last year that the valuation has since fallen to below $500 million.