Bengaluru-based edtech company Unacademy is making a major strategic shift as it looks to move past survival mode and return to growth. The SoftBank-backed startup plans to transition all its company-operated offline learning centres to a franchise model, aiming to reduce costs and operate in a more capital-efficient way.
The move signals a clear change in priorities for Unacademy, which has spent the past two years navigating funding challenges, slowing demand in the edtech sector, and unsuccessful acquisition talks. By April this year, the company expects to complete the transition, marking a new phase in its offline education strategy.
A Strategic Pivot Toward Capital Efficiency
Moving Away From Company-Owned Centres
Unacademy currently runs several offline centres that are fully owned and operated by the company. While these centres helped the firm establish a physical presence and strengthen its brand, they also required heavy investment in real estate, staffing, and operations.
According to a report citing an internal email from co-founder Gaurav Munjal, Unacademy will now hand over operations of these centres to franchise partners. This shift will allow the company to expand its offline footprint without bearing the full financial and operational burden.
The goal is to focus on growth rather than simply managing costs and staying afloat.
Why Franchising Makes Sense Now
The franchise model is widely seen as a more sustainable approach in the current edtech environment. It allows companies to scale faster while limiting capital expenditure, especially at a time when investor funding has become more selective.
For Unacademy, this change reduces fixed costs and improves cash flow, giving it more flexibility to invest in technology, content, and marketing.
What the Franchise Model Means for Unacademy
Lower Costs, Faster Expansion
Under the new model, franchise partners will manage day-to-day operations, including infrastructure and staffing. Unacademy will provide academic content, brand support, and technology platforms.
This structure allows Unacademy to grow its offline presence in multiple cities without committing large sums of capital upfront. It also shifts some operational risk to local partners who may have better knowledge of regional markets.
Continued Focus on Academic Quality
Despite the operational change, Unacademy is expected to retain control over curriculum design, faculty training standards, and digital learning tools. This ensures consistency in quality across centres, even as ownership shifts to franchisees.
Maintaining brand trust will be critical as Unacademy competes with other offline-first and hybrid education players.
Timing Tied to Failed Acquisition Talks
upGrad Deal Collapse
The strategic shift comes shortly after Unacademy’s acquisition talks with upGrad fell through. The discussions reportedly broke down due to differences over valuation.
Unacademy was seeking a valuation in the range of $300 million to $400 million, a figure that could not be agreed upon by both sides. The collapse of the deal highlighted the gap between startup valuation expectations and current market realities.
Earlier Talks With Other Players
Before discussions with upGrad, Unacademy had explored potential transactions involving K-12 Techno Services and PhysicsWallah, which recently listed on the stock market. None of these talks resulted in a deal.
These repeated dead ends appear to have reinforced the need for Unacademy to strengthen its standalone business rather than rely on mergers or acquisitions.
The Broader Edtech Slowdown
From Boom to Reality Check
India’s edtech sector saw explosive growth during the pandemic, driven by school closures and a surge in online learning. Companies raised massive funding rounds and expanded aggressively into offline formats.
As normalcy returned, demand softened, costs rose, and investor sentiment cooled. Many edtech firms were forced to cut staff, shut down centres, or rethink expansion plans.
Unacademy’s pivot reflects this industry-wide reset.
Shift Toward Sustainable Models
Investors are now prioritizing profitability and sustainable growth over rapid expansion. Asset-light models, such as franchising, fit well with this new mindset.
By reducing its cost base, Unacademy is aligning itself with what the market now expects from mature startups.
How This Affects Employees and Partners
Internal Impact
The transition to franchising may change roles for employees involved in offline operations. While Unacademy has not publicly detailed staffing plans, such shifts often involve restructuring or redeployment of teams.
The internal communication reportedly emphasized the company’s intent to move from survival-focused decisions to growth-oriented ones, suggesting confidence in the new direction.
Opportunities for Local Entrepreneurs
For franchise partners, Unacademy’s move creates opportunities to tap into an established brand with a proven digital ecosystem. Local operators can benefit from Unacademy’s curriculum, technology, and national marketing reach while running centres independently.
This could help Unacademy deepen its presence in smaller cities and towns where local partnerships are often more effective.
Competition in the Offline Education Space
Facing Strong Rivals
Unacademy’s offline business competes with well-funded players such as PhysicsWallah, Allen Career Institute, and Aakash Educational Services. Many of these rivals already operate asset-light or hybrid models.
To stay competitive, Unacademy will need to ensure its franchise centres deliver strong outcomes for students, particularly in highly competitive exam preparation segments.
Blending Online and Offline Strengths
One of Unacademy’s key advantages is its strong digital platform and educator network. If integrated well, the franchise model could allow the company to offer a seamless online-offline learning experience.
This hybrid approach could help differentiate Unacademy in a crowded market.
Leadership’s Message: Growth Comes First
A Shift in Mindset
The internal email reportedly made it clear that Unacademy wants to move beyond defensive strategies. After years of navigating layoffs, funding pressures, and stalled deals, the company is now focused on building a leaner, more scalable business.
This mindset shift may also influence future decisions around product development, partnerships, and expansion.
Staying Independent for Now
With acquisition talks off the table, at least for the moment, Unacademy appears committed to strengthening its core business and charting its own path forward.
The franchise move suggests confidence that the company can grow sustainably without relying on external bailouts or consolidation.
What Lies Ahead for Unacademy
The transition to a franchise-based offline model marks a critical turning point for Unacademy. If executed well, it could reduce financial strain, improve scalability, and position the company for long-term growth in a challenging market.
However, success will depend on maintaining academic quality, managing franchise relationships effectively, and continuing to innovate in digital education.
As India’s edtech sector matures, Unacademy’s strategy may become a case study in how startups adapt when easy funding disappears and sustainable growth becomes the priority.
