Ronnie Screwvala’s upGrad secured $225 Mn in a new funding round. With this, the edtech startup’s total valuation has soared to $2.25 billion.
Ronnie Screwvala’s upGrad has secured $225 million in a new round of investment from James Murdoch’s Lupa Systems LLC and Educational Testing Service (ETS), a US-based testing and assessment organization that creates standardised examinations such as the TOEFL and Graduate Record Examination (GRE).
The round was attended by existing investors such as Temasek Holdings and the family offices of billionaires Lakshmi Mittal (of ArcelorMittal SA) and Sunil Bharti Mittal (of Bharti Airtel).
The financing cycle has not yet come to a finish. In the same round, upGrad hopes to raise another $100 million at a higher value.
Ronnie Screwvala, Phalgun Kompalli, Mayank Kumar, and Ravijot Chugh founded upGrad in 2015. The aim was to provide higher education courses in conjunction with other universities. After raising $185 million in August 2021, the edtech firm became India’s third edtech unicorn.
On its platform, it claims to have over a million pupils. Screwvala has stated that by the end of FY23, the number of students will have increased to 3 million.
That was also the last fundraising round for upGrad. Since then, it has bought four more firms for about $100 million, including Global Study Partners, Talentedge, Work Better, and data science institute INSOFE.
UpGrad’s overall valuation has risen to $2.25 billion, implying that about 10% of its stock has been diluted as a result of the new round of fundraising.
UpGrad’s fundraising comes at a time when the edtech sector in India is in flux. The sector has been damaged, with big-name businesses like Unacademy and Vedantu, as well as many more, laying off employees. So far, about 3,100 people have been laid off by nine edtech companies.
Screwvala stated that his edtech unicorn is aiming for $500 million in gross revenue in FY23, with 75% of that coming from college students and working professionals in India. However, he predicted that during the next three years, local and foreign sales will be equivalent.
Ronnie Screwvala has also stated that the edtech unicorn plans to go public in two years. In FY21, upGrad’s loss increased by over 2.6X, with a consolidated loss after tax of INR 211 Cr, up from INR 78.8 Cr in FY20.
At the same time, upGrad’s activities generated INR 302 crore in consolidated revenue, an increase of 86 percent from INR 162.3 crore in FY20. In FY21, the Bengaluru-based company reported total costs of INR 513.7 crore, up 112.8 percent from INR 241.4 crore in FY20.