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Ronnie Screwvala’s UpGrad to raise $40 mn at $400 mn valuation

UpGrad, founded by Ronnie Screwvala, Mayank Kumar, Ravi Chug and Prabhav Phalgun, has acknowledged interest from investors groups to raise $40 Million for a 10 per cent stake. The funds would be allocated across building a global tech platform, investment in courses, content facilities and studios, marketing – both offline and online, international expansion and the creation of 50 offline UpGrad Xchange Centres for engagement and networking. This announcement comes close to the heels of Screwvala’s plans to expand UpGrad into the UAE and SE Asian markets. 

The company had ventured into the EdTech category in 2016 with an aim to disrupt the sector and provide working professionals who are in constant need to upgrade and upskill an opportunity to access quality online education. Today, UpGrad has become the largest player in the category, targeting a revenue rate of Rs 20 crore a month in March 2018, leading to an annual run rate of Rs 250 crore and run rate of students of over 8,000 by March 2018.  

Ronnie Screwvala commented, “Both Mayank and I are of the strong belief that opportunity with EdTech is unbounded. With the speed at which our working professionals in India need the ‘Upgrading’ and ‘Upskilling’, there is no choice but to look at things exponentially. Keeping this in mind, we have decided to open the company to a 10 per cent dilution and capital raise for us to take all our initiatives. Personally, I do believe that equity is the most valuable asset at this juncture of UpGrad and hence, we are taking a cautious step towards this dilution.” 

The online education platform claims to have a 95 per cent completion rate and till now has reached over a quarter of a million young professionals through courses in Data Science, Machine Learning & Artificial Intelligence, Software Development, Digital Marketing & Communications, Big Data Engineering, Entrepreneurship and Product Management.  

In a short span of 2 years since its launch, the online education major has also formed alliances with reputed institutes like IIIT Bangalore, BITS Pilani, IMT Ghaziabad, SPJIMR, MICA Ahmedabad, and Cambridge UK, among many others. UpGrad is also the official education partner for Government of India’s Start Up India learning programme for which the EdTech company has built the largest enrolment program online program in the country. 

Commenting on the size and potential of the EdTech market, Screwvala said, “The Higher Ed Universe is a massive 150 million students and the core of approx 60 million, who are working professionals presently, will look to UpGrade in the very near future. As 10 per cent of them look to online learning, this will create a $6 billion revenue opportunity in the next 5 years and the lead player and early mover, which UpGrad plans to be, could have a one-third share, leading to a potential of $2 billion revenue. In the very immediate future, there is a job creation and specific opportunity for at least 1 million jobs each across Data, Management and Software Development and Coding. That’s 3 million jobs! With an average cost of Rs 2 lakh for online courses, the opportunity is a whopping 75,000 crore and we firmly believe that this is just the start and the category remains massively underserved.”

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