PremiumBENGALURU: Ronnie Screwvala’s upGrad, which focuses on higher education and upskilling working professionals, has joined India's coveted league of unicorns - startups valued at $1 billion or more.
The edtech on Monday said it has closed $185 million in external funding from Temasek Holdings, International Finance Corporation (IFC), a member of the World Bank Group, and IIFL at a valuation of $1.2 billion.
upGrad had announced the first close of $120 million from Temasek in April this year, marking the first external fund raise by the firm since its inception in 2015. The edtech company had in February said it will raise around $45 million from IFC.
The company is now in talks to raise another $400 million at a valuation of $4 billion, confirmed two individuals aware of the discussions. The new round is expected to be closed in the coming weeks with existing investors also participating as a part of the round, said one of the people quoted above.
IIFL has invested around $20 million as a part of the round. With the fundraise, upGrad’s founders continue to hold more than 70% stake in the company.
The round makes upGrad the third edtech to enter the Indian unicorn startup league. Two Indian edtech companies targeting kindergarten -12 (K-12) and test prep market--Naspers and Tiger Global-funded Byju’s and SoftBank-backed Unacademy--are already unicorns.
Last week, upGrad’s biggest external backer Temasek also led Unacademy’s $440 million Series H round, valuing the company at $3.44 billion.
upGrad’s entry takes the total count of Indian startups turning into unicorns to 21, this year.
“We are very focussed on our path to being in the top 3-5 companies 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 fund raise, and had our maiden raise from Temasek, followed by IFC and IIFL in the last 60 days," said Ronnie Screwvala, chairperson and Co-founder, upGrad confirming the news.
“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," added Screwala, in a written response.
This year, upGrad has made two acquisitions - buying upskilling platform KnowledgeHut to mark its foray in short-duration professional courses segment; and video-learning solutions provider, Impartus to provide digital learning tools to education institutions and colleges.
It has roughly spent more than $50 million in acquisitions this year alone.
Overall, the company has made close to seven acquisitions and acqui-hires till date. These include online training software platform, Pyoopil; online job skilling platform, Acadview; and product community platform, CohortPlus.
In 2020, upGrad acquired The Gate Academy to foray into the competitive test preparation segment, and staffing solutions platform, Rekrut India.
The company also recently earmarked a corpus of $250 million for acquisitions, to drive its inorganic international growth over the next 7-9 months.
The edtech platform has been aggressively focusing on its international foray into Singapore, Indonesia and Vietnam in Southeast 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 over the next two years, the company told Mint earlier in June, this year.
To fuel its growth plans, the company was planning to hire more than 1,000 employees over the next three months, it said in June.
Indian edtechs Byju’s and Unacademy are also aggressively doubling down on the higher learning and upskilling space.
Recently, Byju’s acquired upskilling platform Great Learning for $600 million, marking its foray into the space. Rival Unacademy also said that it will be actively focussing on the upskilling segment after raising $440 million, last week.
In fiscal FY22, upGrad is expected to cross a monthly revenue run rate of Rs250-300 crore, as it looks to exit the financial year with revenues of Rs3,600 crore (or half a billion dollars), Screwvala had said earlier.
