Singapore sovereign wealth fund Temasek has invested an extra $60 million in the upskilling and higher education firm Upgrad, which has a flat valuation of $2.25 billion. They said that Ronnie Screwvala, the founder and chairman of Upgrad, had paid $20 million to acquire Bharti Enterprises' share of the company.
Following Upgrad's stock swap acquisition of the skilling and training solutions company Centum Learning in 2022, Bharti Enterprises owned 1% of the company.
Screwvala, a seasoned businessman who founded UTV, currently holds a 45% ownership position in Upgrad. After cofounder Mayank Kumar left the edtech company, he is taking on a larger role, according to an October 16 ET article that also discussed the upcoming fundraising round.
Upgrad's ambitions for an IPO in India coincide with Screwvala's return, and the serial entrepreneur's increased involvement at the company could be encouraging to public market investors.
Even though the edtech industry is still under widespread stress, Upgrad's $80 million fundraising round, which includes the secondary deal between Bharti Enterprise and Screwvala, is the third largest funding round in the industry.
In September, the executive education firm Eruditus closed a $150 million investment at a flat valuation of $3.2 billion, while PhysicsWallah recently closed a $210 million funding.
Evolution X, a joint venture between DBS and Temasek, provided Upgrad with $35 million in debt financing prior to the equity round.
According to statistics from Tracxn and ET's computation, edtech firms have received about $650 million in funding so far this year, up from $4.1 billion in 2021, the sector's high helped by Covid-19 tailwinds.
This is still greater than the $315 million raised for edtech in 2023, which was an 87% decrease from the $2.4 billion raised in 2022. This indicates that the sector's fundraising markets are still declining.
Another person with knowledge of the situation stated, "Centum Learning is now a part of Upgrad Enterprise, and that's the fastest growing vertical at Upgrad."
"Enterprise revenue growth is robust and order book is Rs 104 crore in Q4 FY24," according to a report from Upgrad investor 360 One. In Q4, Upgrad's skilling and reskilling and placement services businesses earned a profit. The cost of acquiring customers for the consumer segment decreased from around 30% in FY23 to about 22% in FY24. In Q4 FY24, income from non-university programs increased by about 22% QoQ and 81% YoY.
Upgrad offers more than 70 courses in data science, management, digital transformation, technology, and law and has partnerships with more than 20 tier-I and tier-II universities.
