Upgrad enters the unicorn club with a $1.2 billion valuation

MUMBAI: Ronnie Screwvala-led upgrad Education, which focuses on higher education and mid-career upskilling, has joined the coveted unicorn club. It has raised $185 million from Temasek Holdings Ltd, International Finance Corp. (IFC), and IIFL Group at a valuation of $1.2 billion, the edtech company said on Monday. In its maiden external funding in late April, upgrad raised $120 million from Temasek. In February, the startup, which was set up in 2015, had said it will raise $45 million from IFC. The company is now in talks to raise another $400 million at a valuation of $4 billion, said two people aware of the discussions, seeking anonymity. Existing investors may also participate in the round, which is expected to be closed in the coming weeks, said one of the two people quoted above.

IIFL invested around $20 million in the recent round. After the fundraise, upgrad’s founders continue to hold more than 70% stake in the company.

upgrad is the third edtech startup to enter the Indian unicorn league. Naspers- and Tiger Global-funded Byju’s and Softbank-backed Unacademy, which cater to the K-12 and test prep markets, are the others. Last week, upgrad’s biggest external investor Temasek had led Unacademy’s $440 million Series H round, at a valuation of $3.44 billion. So far this year, 21 Indian startups have gained unicorn status. “We are very focussed on our path to being in the top three to five firms globally for edtech and serving the 1 billion workforce across the age group of 18 to 60 years. We are pleased with the investor interest ever since we opened up for a fundraise and had our maiden raise from Temasek, followed by IFC and IIFL in the last 60 days,” said Screwvala, chairperson and co-founder, upgrad. “We will announce further updates on acquisitions and unlocking value as they unfold. Yes, the last value was at $1.2 billion, but as I keep saying, we are not a fan of the tag name unicorn. For us, it is only a means to a much larger goal,” he said in a written response.

This year, upgrad has already made two acquisitions, including upskilling platform Knowledgehut to mark its foray into the short-duration professional courses segment, and videolearning solutions provider Impartus to provide digital learning tools to education institutions and colleges.

It spent more than $50 million in acquisitions this year alone. The company made seven acquisitions and acquihires till date, including online training software platform Pyoopil, online job skilling platform Acadview, and product community platform Cohortplus. In 2020, it had acquired The Gate Academy to enter the competitive test preparation segment, and staffing solutions platform Rekrut India.

The company also earmarked a corpus of $250 million for acquisitions, to drive its international growth over the next seven to nine months. The edtech platform has been aggressively focusing on its entry into Singapore, Indonesia and Vietnam in South-east Asia, as well as the UK, West Asia, North Africa, and the US, this year. It expects 40% of its revenues to come from international markets in the next two years, the company told HT Mint earlier in June. To fuel its growth, the company was planning to hire more than 1,000 employees by September. Byju’s and Unacademy are aggressively doubling down on the higher learning and upskilling space. Recently, Byju’s acquired upskilling platform Great Learning for $600 million, while Unacademy said it will actively focus on the upskilling segment after raising $440 million. In FY22, upgrad is expected to cross a monthly revenue run rate of ₹250 crore to ₹300 crore, as it looks to end the year with revenues of ₹3,600 crore.