upGrad co-founder and chairman Ronnie Screwvala talks about the company’s acquisition strategy as it looks to foray into short-form courses. He expects 40% of company's revenues to come from international markets over the next two years
Edtech platform for higher education, upGrad, is looking at inorganic growth to expand its footprint in international markets and enter new verticals.
The startup has acquired six companies so far and will hire more than 1,000 employees over the next three months to fuel its growth. It had recently raised $120 million from Temasek Holdings as part of its first institutional funding, and is in the process of raising another $40 million from International Finance Corp. (IFC).
In an interview, upGrad co-founder and chairman Ronnie Screwvala shares the company’s acquisition strategy as it looks to foray into short-form courses. The company expects 40% of its revenues to come from international markets over he next two years. Edited excerpts:
What is your acquisition strategy?
A majority of the courses at upGrad range between six to 24 months. We want to introduce short-form refresher courses ranging from 10 to 100 days, and may look at an acquisition to build it out. Moreover, our acquisitions are aligned to our international expansion plans, and we will look to boost our presence in the US, Australia and Indonesia. For international geographies like the US, we will look at a build-and-buy strategy, since there’s much happening in the edtech sector. It’s safe to say that we will build ground up on our own in these markets, while looking at acquisitions. Similar to India, we will continue to maintain our focus on higher learning in these markets.
What are your international expansion plans?
By geography, upGrad is focussed on Singapore, Indonesia, Vietnam, the UK, Middle East, Australia and North Africa, and the US. By July, we will launch our courses across geographies, and are currently building on ground teams, hiring country leads and region heads. Our international strategy is based on localization, as we build localized teams and strengths in different geographies.
For products, we will focus on working professionals in these international geographies and offer our entire gamut of services including certification, diploma and degree courses. We will also look to offer doctorate and PhD programmes.
For the US, bootcamps are going to be an interesting and large opportunity to go after.
upGrad is also focusing on the study-abroad segment, where we are taking a cost-effective hybrid approach for international courses. For the first one and a half years, individuals can learn and take classes online from universities abroad, and for the remaining period, attend campus courses, which results in considerable cost reduction.
How much will international geographies contribute to your overall revenues, going ahead?
We estimate that international geographies should contribute almost 40% towards our revenues over the next two years. Having said that, we continue to build for these international geographies from India and keep our costs in check.
What are your revenue targets for upGrad?
In March, we hit a monthly revenue run rate of ₹100 crore and an annual revenue run rate of ₹1,200 crore. Considering the acquisitions (which we have undertaken) and expansion to new geographies, we expect to touch a monthly revenue run rate of ₹250-300 crore by March 2022, and the overall revenue target for the current financial year is over ₹3,600 crore (or half a billion dollars).
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