Unacademy will launch 15 offline centres across nine cities within 30 days from now and its initial setup in Rajasthan’s Kota will be operational in a few more days while the others will follow soon, chief operating officer, Vivek Sinha said in an interview to FE. Sinha added Unacademy plans to have 100,000 students across offline centres in 12 months from now, scaling up from 15,000 learners it estimates in the first batch.
The increased focus on the offline category comes at a time when schools, colleges and universities have resumed physical classes as the pandemic ebbs and people return to classrooms, after nearly two years of virtual classes. With these expansion plans, Unacademy will operate a hybrid setup – a mix of both offline and online learning, not just a traditional offline coaching centre. This marks the entry of another major edtech player into the offline teaching space, second to Byju’s-owned Aakash Institute.
“Our goal is to solve the need of our students. If a learner thinks the structure and discipline of a physical class is missing and is essential for them to crack the exam, our job is to make a product which solves for that. The need for offline centres varies across the spectrum. For instance, it is needed in the undergraduate and below categories but for the post-graduate and the levels around that, there is no real need” said Sinha.
That move back to physical classes has visibly slowed the growth prospects of several edtech players. “We are looking at a time where funding will dry up for at least 12-18 months. Some people are predicting that this might last 24 months,” Unacademy’s co-founder and chief executive officer, Gaurav Munjal wrote in an email to employees last month.“We must survive the winter. We have a different iconic goal this time. The goal is of profitability.
The goal is of generating FCF (free cash flow),” the email added. Bracing for that slowdown, Unacademy laid off over 600 employees this year. The slowdown has also impacted its edtech peers like Vedantu, Invact Metaversity, FrontRow as all of them have sacked several employees to reduce costs. Lido Learning, in February, asked 1,200 of its staff to resign while Udayy fired all of its 100 plus employess and shut shop because its entirely online teaching model didn’t yield desired results.However, Sinha said Unacademy is ‘sufficiently capitalised for all our offline expansion plans.
Funds don’t look like a constraint in this regard. We also have a 48 months runway.’With this latest expansion plans it aims to reach all major Indian cities but didn’t provide the amount it has set earmarked for this foray. For context, its competitor and India’s most valuable edtech start-up, Byju’s has already committed $200 million for its offline push.
Over the the past year, it has launched 126 hybrid centres in over 23 cities and plans to scale that up to 500 centres across 200 cities this year alone. Byju’s acquiring the traditional coaching centre, Aakash Institute last year has also helped it become a dominant player in the offline space. Over 2020 and 2021, Byju’s has acquired around 12 companies, while Unacademy acquired 10 companies in the same timeline.
“There are no exploding M&A (mergers and acquisition) deals expected over the next 30-45 days. We want to first explore the offline coaching space by ourselves before we even consider M&As as an option,” said Sinha. Meanwhile, Unacademy is counting on its largest division – the test preparation category – to help it inch closer to its profitability goal.
“The test preparation category, which accounts for over 60% of our total portfolio, will be profitable by end of financial year FY23. Once our largest division is profitable, Unacademy will soon become profitable too,” COO Sinha explained.
But, Munjal – in his aforementioned email – had said that every test preparation category must be profitable in three months. “Three months from now, say in August, picking every test preparation category and checking if it is profitable is not is not the right way to look at things. We’ll have to see if in a year we have turned the division profitable or not. A lot of the categories are already profitable but remember, test preps are seasonal, we have an influx of students for three-four months but teacher costs are spread over 12 months,” Sinha argued.