Online higher education company upGrad has raised $225 million in a fresh funding round, increasing its valuation to $2.25 billion.
The participation in the funding round included James Murdoch’s Lupa Systems LLC and US testing and assessment provider Educational Testing Service (ETS), according to a person familiar with the deal. The family offices of Indian billionaires Lakshmi Mittal of steelmaker Arcelor Mittal SA and Sunil Bharti Mittal of telecom operator Bharti Airtel also participated in the round along with existing investors including Temasek Holdings Pte, according to Bloomberg citing the person who asked not to be identified as the details are confidential.
“India will write the global higher-edtech story,” Ronnie Screwvala, the company’s Co-founder & Chairman, reportedly told Bloomberg over a video call. “There’s an insatiable global appetite for upskilling and upgrading to diplomas, degrees, and doctorates, all of which have measurable outcomes such as a new job, a raise, or a promotion, he said.”
According to the report, the latest funding round will increase by a further $100 million during a second close at a higher valuation.
Screwvala founded upGrad in 2015 with Mayank Kumar and Phalgun Kompalli to offer short courses on entrepreneurship and data science. The Mumbai-based company spans several segments, from test prep to study abroad, and undergrad degrees to campus courses in 250 universities. Its offerings include finance, law, business, and software for the 18-60 age group.
upGrad targets $500 million in gross revenue in the year ending March 2023. College students and working professionals in India will account for four-fifths of that, but in about three years, domestic and international sales will even out, the founder said. Besides India, upGrad is growing rapidly in Indonesia, Vietnam, and the Middle East.
“Global EdTech consolidation is on the cards and we’ll build a $30 to $40 billion higher-ed company,” Screwvala said. “We plan to have an IPO in about two years – for solidly built companies, there’s no good or bad time for an IPO, he added.”
Screwvala, 65, built a trend-setting cable-TV company in India in the 1980s, turning it into a unicorn that was acquired by Walt Disney Co. His latest startup, upGrad, raised $185 million from Temasek, IFC, and IIFL almost a year ago at a valuation of $1.2 billion, making the company becomes India’s 21st startup that has attained unicorn status in 2021.