Unacademy CEO Denies $800M Acquisition Rumors, Reaffirms Long-Term Vision

Unacademy’s co-founder and CEO, Gaurav Munjal, recently dispelled rumors about a potential acquisition by Allen Career Institute for $800 million.

The speculation suggested that the edtech giant was negotiating a deal at a valuation significantly lower than its $3.4 billion peak in 2021.

However, Munjal addressed these claims head-on, asserting that Unacademy is firmly focused on long-term growth and operational improvements.

In a strongly worded statement on social media, Munjal declared, “We have many years of runway. We are building Unacademy for the long run. We are not doing any sale or M&A. Ignore the rumors.”

This response comes at a critical juncture for the company as it seeks to reinforce its market position while navigating challenges in a competitive industry.

The denial of these acquisition rumors shifts the spotlight onto Unacademy’s recent performance and its plans for the future.

Financial Performance: Gains and Losses

Unacademy’s financial report for FY24 paints a complex picture of its recent performance. While the company’s total revenue dipped by 5.3%, falling from ₹1,044 crore in FY23 to ₹988.4 crore this year, its losses have seen a significant reduction.

The company’s net losses dropped from a staggering ₹1,678 crore in FY23 to ₹631 crore in FY24. This marked improvement in financial health is attributed to enhanced unit economics and a deliberate effort to cut costs.

The group’s cash burn has been slashed by 50%, signaling greater operational efficiency.

Despite a revenue decline, these financial adjustments provide a strong foundation for Unacademy’s future endeavors.

The company has successfully positioned itself as a resilient player in a highly competitive market, boasting substantial cash reserves of approximately $170 million (₹1,500 crore) and no debt.

With a financial runway extending over four years, Unacademy’s leadership exudes confidence in its ability to sustain and grow.

Offline Growth and Strategic Expansion

One of the most promising developments for Unacademy is its progress in the offline segment. The company’s offline arm, Unacademy Centres, recorded an impressive 30% growth over the past year.

These centers have also benefited from improved unit economics, further enhancing their contribution to the company’s overall performance.

The offline segment has emerged as a key area of focus for Unacademy, reflecting its strategy to diversify beyond online test preparation.

Gaurav Munjal has repeatedly highlighted the importance of offline growth as a critical pillar for the company’s long-term success. In his words, “This year will be Unacademy’s best in terms of growth in the offline business and overall unit economics.”

Success of Subsidiary Ventures

Unacademy’s subsidiaries have also demonstrated remarkable progress, showcasing the company’s ability to innovate and expand into new domains.

Graphy, a platform under the Unacademy umbrella, achieved a 40% growth rate while maintaining profitability. This performance underscores the scalability and sustainability of its business model.

Another notable achievement is the rapid success of Airlearn, a newer offering designed to cater to international markets.

Within months of its launch, Airlearn achieved an annual recurring revenue (ARR) of nearly $400,000 in the U.S., highlighting the venture’s potential in global markets.

These successes reflect Unacademy’s commitment to diversifying its portfolio and exploring new opportunities.

A Competitive Landscape: Physics Wallah Joins the Conversation

Amidst Unacademy’s efforts to solidify its market position, Physics Wallah founder and CEO Alakh Pandey weighed in on the ongoing narrative.

In response to Munjal’s social media post, Pandey commented, “This sounds so good. I miss the old times of fierce competition. I am waiting for the same. It is only when we compete, students get more options. Wish you luck.”

Pandey’s remark alludes to the competitive dynamic between the two edtech giants. Known for his humble beginnings and an unwavering focus on affordability, Pandey famously rejected a ₹75 crore acquisition offer from Unacademy.

This decision allowed Physics Wallah to flourish independently, eventually becoming a unicorn valued at $2.8 billion by 2024. The comment serves as a reminder of the rivalry that continues to shape India’s edtech landscape.

Diverging Strategies: Affordability vs. Expansion

The contrasting strategies of Unacademy and Physics Wallah reveal the evolving nature of the edtech industry.

While Unacademy is channeling its resources into expanding its offline presence and refining its unit economics, Physics Wallah remains committed to providing affordable and accessible education.

This divergence highlights the varying approaches companies are adopting to capture market share and address the diverse needs of students.

Looking Ahead: Building for the Long Run

Gaurav Munjal’s recent statements reflect a company determined to chart its own path amid external speculation and financial scrutiny.

By emphasizing improved operational efficiency, strategic expansion, and subsidiary growth, Unacademy aims to demonstrate its resilience and adaptability.

The company’s significant financial runway and strong cash reserves further bolster its position as a key player in the edtech industry.

As Unacademy continues to focus on long-term growth, its journey serves as a testament to the challenges and opportunities inherent in the rapidly evolving world of education technology.

While acquisition rumors may have sparked debate, Munjal’s message remains clear: Unacademy is not for sale, and its best days lie ahead.