Unacademy Focuses on Profitable Growth in Edtech Sector

Unacademy is shifting its strategy towards profitable growth after a comprehensive cost restructuring, as indicated in an internal message sent by co-founder and CEO Gaurav Munjal to the team. In this communication, Munjal revealed that Unacademy has cut its test preparation expenses to around Rs 200 crore in 2024 from nearly Rs 450 crore previously. This significant adjustment followed operational changes, which included discontinuing underperforming initiatives and concentrating on core business areas.

Munjal mentioned that several key exam preparation segments like UPSC, NEET PG, and CAT have achieved a positive contribution margin. He also pointed out that both PrepLadder and Graphy had managed to maintain positive cash flow throughout the year. In addition, the language learning platform Airlearn increased its annual recurring revenue from approximately $200,000 at the beginning of 2025 to nearly $3 million by year-end.

Restructuring Plans at Unacademy

As part of the restructuring efforts, Unacademy plans to wind down its company-operated offline centre business in the coming months by transitioning these centres into franchise partnerships. Munjal stated that this franchise model would enable local operators to oversee day-to-day operations while Unacademy supplies academic resources, technological support, and outreach capabilities. The company expects to complete this transition by April, resulting in a significantly streamlined cost structure.

Acquisition Talks and Future Growth

The internal message comes on the heels of halted acquisition discussions between Unacademy and upGrad, primarily due to differences in valuation. These talks had been ongoing for several months amidst a general slowdown in edtech transactions and valuation adjustments throughout the startup landscape. upGrad co-founder Ronnie Screwvala confirmed that the deal did not come to fruition.

Munjal expressed that the focus for 2026 will shift towards growth rather than mere survival, highlighting improvements in unit economics across online test preparation and an unexpectedly rapid expansion for Airlearn. He concluded that Unacademy is now better positioned to scale operations with enhanced financial discipline.