upGrad raises $210 million at $2.25 billion valuation in round led by ETS Global, Bodhi Tree

Edtech unicorn upGrad has raised $210 million in a funding round at a valuation of $2.25 billion, led by ETS Global, one of the world’s largest providers of global entrance tests like GRE and TOEFL, and Bodhi Tree, an investment vehicle set up by media veterans Uday Shankar and James Murdoch, among others.

Singapore’s Kaizen Management Advisors, the Family Office of Bharti Airtel, Narotam Sekhsaria Family Office (family office of Ambuja Cements and ACC), and Artisan Investments (the family office of Arcelor Mittal’s Lakshmi Mittal ) along with existing investors Temasek, IFC (International Finance Corporation) and IIFL also participated in the round, the company said.

upGrad’s founders–Ronnie Screwvala, Mayank Kumar and Phalgun Kompalli–also invested $12.5 million in this round to maintain their ownership of over 50 per cent of the edtech unicorn, upGrad said.

The firm will use the funds to strengthen its team to 7,600 employees from the present 4,800 in the next three months. The unicorn will also include about 170 full-time faculty members, 1,600 teachers, and over 5,000 on-contract coaches and mentors.

“There is a massive re-skilling revolution taking place around the world, and over the last five years, our 4,800 colleagues have worked hard and smart to be at the epicentre of taking advantage of this, not just in India but around the world,” said Ronnie Screwvala and Mayank Kumar in a joint statement.

“Higher edtech will be on the rise for the next 4 to 5 decades. upGrad, in the last 12 months, has re-shaped itself to be the most integrated company in this space with career opportunities for the College learners and Working Professionals from 18 to 58 and will be a lifelong learning partner for millions in the coming years,” the founders added.

upGrad claimed that it has a programme completion rate of more than 80 per cent and said that 40 per cent of the company’s total revenue is realised from repeats and referrals year on year.

upGrad said it is on track to record annual gross revenue of $400-500 million during FY23 (2022-23), out of which about 45 per cent of total revenue will be realised from its own-branded online courses and programmes.

To be sure, upGrad had a revenue of Rs 302.6 crore ($40.8 million) for the year ended March 2021 (FY21), according to the company’s filings on the Ministry of Corporate Affairs (MCA). The company has yet to file its financial results for March 2022. In FY21, the company reported a loss of Rs 211.1 crore ($28.5 million).

upGrad’s multi-million dollar fundraising and aggressive hiring plans come when edtech companies in India, including some of the highest-valued unicorns like Unacademy, Byju’s and Vedantu, are firing hundreds of employees amid a blip in demand for their services. The slowdown in demand has hit revenue projections of these edtech companies, forcing investors to go cool on the sector, especially at late stages. Edtech companies in India have fired close to 6,000 employees in 2022 alone.

However, investors continue to be bullish on India’s education market. Early-stage investments in India’s edtech companies had bucked the global trend by jumping over 2.5x in the first seven months of 2022.

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