Upgrad earmarks USD 250-million M&A war-chest

By: |
July 07, 2021 7:31 PM

The largest higher online education platform in South Asia is banking on non-linear strategy to drive growth and also to consolidate leadership in global higher education space as it plans to enter southeast Asia, the company said on Wednesday.

Online up-skilling and re-skilling platform UpgradThe Temasek and IFC-backed online up-skilling and re-skilling platform Upgrad has more than doubled its customer base, thanks to the pandemic.

To drive faster growth through inorganic route, the Temasek and IFC-backed online up-skilling and re-skilling platform Upgrad, which has more than doubled its customer base thanks to the pandemic, has created a USD 250-million war-chest for acquisitions, which it hopes to conclude over the next three quarters.

The largest higher online education platform in South Asia is banking on non-linear strategy to drive growth and also to consolidate leadership in global higher education space as it plans to enter southeast Asia, the company said on Wednesday.

“We have earmarked USD 250 million for M&As over the next 7-9 months,” Upgrad said in a statement quoting founder chairman Ronnie Screwvala, adding the first two such deals will be announced over the next two months.

Recently, Screwvala had told PTI that he had set a target of doubling its revenue run rate to over Rs 2,400 crore this fiscal from Rs 1,200 crore in FY21, which was a multiple times jump from the previous year when its was only Rs 230 crore.

With aggressive growth, the five-year-old company, which joined the edtech bandwagon only in 2015, aims to capture close to 70 per cent of the online higher education market for working professionals.

“We continue to build a very strong, integrated, connected model in online higher education across multiple geographies. We see a very strong value currency in our stock to look to merge/acquire companies with exceptional founders who will join us as fellow entrepreneurs to build this out over the next decade,” Screwvala explained his non-linear growth strategy.

He said Upgrad has already identified specific segments as well as target companies–one from platform and high touch digital learning experience side and the other from from the immersive short form learning–will be announced over the next 60 days.

As part of this, it will also be shortly entering Africa, Indonesia, and Vietnam, he said, adding another strategy is entering into strategic long-term tie-ups with universities.

Offering over 100 courses in collaboration with top-notch global universities like Michigan State University, Liverpool John Moores University, Swiss School of Business Management, IIT Madras and IIM Kozhikode aong others, Upgrad is South Asia’s largest online higher edtech company having trained over 1 million learners for across 50 countries.

Upgrad received its maiden external funds of USD 160 million from the Singaporean investment giant Temasek Holdings (USD 120 million) and the rest from the World Bank Group arm IFC within a span of a week, divesting 25 per cent of the promoters’ equity.

This has taken Upgrad, co-founded by the ex-media baron Screwvala, Phalgun Kompalli, Mayank Kumar and Ravijot Chugh in 2015 by investing over Rs 170 crore (USD 22 million), closer to the unicorn status, valuing it at USD 850 million.

Last fiscal its growth was driven by an exponential demand for upskilling/re-skilling as the pandemic-driven lockdowns forced companies to send their employees home, which demanded a lot of upskilling/reskilling.

This also helped it more than double its customer base–from around 5 lakh professionals who took to its learning and upskilling courses between its founding in 2015 and March 2020, to cross 1 million between April and December 2020.

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