upGrad raises $185 million in fresh funding

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August 10, 2021 5:15 AM

The six-year-old company founded by Ronnie Screwvala, Mayank Kumar and Phalgun Kompalli launched the maiden external funding series in April with a $120-million investment from Temasek. It garnered another $40 million from IFC as part of the same round.

The firm is reportedly also looking to raise as much as $400 million in a new financial round at a valuation of $4 billion.The firm is reportedly also looking to raise as much as $400 million in a new financial round at a valuation of $4 billion. (Representative image)

Education technology start-up upGrad has raised an additional $25 million in fresh funding, thereby closing a $185-million financial round backed by Temasek, International Finance Corporation (IFC) and IIFL. The investment round gives the ed-tech firm a post-money valuation of $1.2 billion, making it the 21st start-up to enter the unicorn club this year.

The six-year-old company founded by Ronnie Screwvala, Mayank Kumar and Phalgun Kompalli launched the maiden external funding series in April with a $120-million investment from Temasek. It garnered another $40 million from IFC as part of the same round. The firm is reportedly also looking to raise as much as $400 million in a new financial round at a valuation of $4 billion.

upGrad said that the founder group still owns over 70% in the company. Although the company did not comment on how it plans to use the capital, the bulk of it is expected to be used for funding M&A (mergers and acquisitions) deals. The firm has already earmarked a significant $250 million for M&A transactions and has recently acquired global ed-tech company KnowledgeHut to gain a foothold in the short duration upskilling and reskilling segment. In an interview with FE in May, co-founder Mayank Kumar had mentioned that M&A is going to be a key growth strategy for the company.

“We are very focussed on our path to being in the top 3-5 companies globally in edtech and serving the 1 billion workforce across the age group of 18 to 60 years,” said Ronnie Screwvala, chairperson and co-founder at upGrad, in a statement on Monday. “We will announce further updates on M&As, and unlocking value as they unfold,” Screwvala added.

upGrad that operates in the higher education segment and offers courses in specialised branches of study including MBA, BBA, data science and machine learning in partnership with a slew of global and local universities, claims to have catered to over 1 million total registered learners in more than 50 countries. The startup has also forayed into the test prep space with the acquisition of The Gate Academy (upGrad Jeet).

Edtech player Byju’s recently announced the acquisition of Great Learning in a significant $600-million cash, stock and earnout deal as it looks to foray into the professional upskilling and higher education space. Byju’s has been on an acquisition spree having already spent over $2 billion on such deals so far this year.

Analysts estimate the market size of the Indian ed-tech sector to grow by 3.7 times in the next five years, to touch $10.4 billion by 2025 from $2.8 billion in 2020. The segment will see more than 37 million paid users by 2025, according to a report by EY-IVCA.

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