Ronnie Screwvala-led upGrad eyeing acquisitions in the US, Southeast Asia

As part of the acquisition strategy, upGrad Rekrut, a 100 per cent subsidiary of upGrad, has acquired Wolves India, a recruitment and staffing firm, for an undisclosed amount

Ronnie Screwvala-led edtech unicorn upGrad has initiated a M&A (mergers and acquisitions) strategy in negotiations to acquire various companies in markets such as the US and Southeast Asia for expansion in those regions. As part of that strategy, upGrad Rekrut, a 100 per cent subsidiary of upGrad, has acquired Wolves India, a recruitment and staffing firm, for an undisclosed amount. It specialises in helping recruit tech talent. 

upGrad is making these at a time when the company almost doubled its valuation to $2.25 billion after raising $225 million in fresh funding from investors such as James Murdoch’s Lupa Systems LLC and family offices of Lakshmi Mittal of steelmaker ArcelorMittal SA and Sunil Bharti Mittal of telecom operator Bharti Airtel, according to the sources. They said the other investors include US testing and assessment provider Educational Testing Service and existing investors, including Temasek Holdings Pte.

“Geographical expansion is definitely a critical area for us,” said Mayank Kumar, co-founder and managing director of upGrad, in an interview. “We are in talks with companies in the US and Southeast Asia, and exploring opportunities where we can expand our presence internationally.”

The international business is so critical that the firm’s other co-founder Phalgun Kompalli, has shifted to the US to lead businesses within the brand there.

“The focus is how we can expand our presence in the US market faster,” said Kumar. “We truly believe that in the next couple of years the international (market) will start accounting for about 30 to 40 per cent of our revenue while we will continue to go deeper in India.”

Bucking the trend of lay-offs in the edtech sector amid a funding crunch, upGrad is looking to add nearly 3,000 people in the next few months through M&A and partly through organic hirings. This would almost help it double its workforce to around 7,000 people.
 

upGrad is targeting $500 million in gross revenue in the year ending in March 2023, according to the sources.

In the edtech space, upGrad competes with players such as Simplilearn, Unacademy, Byju’s and Amazon Academy. Last year in July, Byju’s acquired Singapore-headquartered Great Learning, a leading global player in the professional and higher education segment, in a transaction valued at $600 million. Both the US and India are large and key markets for Byju’s. Byju’s has been making a slew of acquisitions in the U.S market to accelerate its plans of becoming one of the largest players in the space in the US, with a target to hit revenues of $1 billion in the next three years.

In August 2021, upGrad acquired edtech firm KnowledgeHut, which is aimed at equipping the global workforce with the skills through outcome-based immersive learning. Kumar of upGrad said that while KnowledgeHut is based out of India, 70 per cent of the business is international.

upGrad Rekrut’s acquisition Wolves India is a company based in Bengaluru. It specialises in placing high-quality tech talent across startups and mid and large-sized organisations in India and overseas. With 70 professionals, Wolves has closed over 5000 placements in technology and product roles. Wolves India will operate independently as a 100 per cent subsidiary of upGrad Rekrut and strengthen its tech placement portfolio. Wolves India will continue to operate under the leadership of its founder and director, Raghu S.

“We are thrilled to welcome Raghu and his team on board to partner with upGrad Rekrut to offer an enhanced placement portfolio, thus enabling upGrad learners with the tech jobs,” said Ajay Shah, managing founder and Husain Tinwala, co-founder of upGrad Rekrut. 

Shah said the company’s vision is to help learners get jobs based on their skills. “We have a lot of techies who come to take up data science programmes and then look for jobs around that (area),” said Shah.

This opportunity is huge for upGrad as the tech industry in India will continue to observe steady demand for skilled talent. According to the experts, it is expected to become a $350 billion market by FY26.

Kumar of upGrad said that Wolves India and upGrad Recrut would help to build a recruitment platform achieving revenue of over $100 million in the next five years.

upGrad’s key acquisitions

Jan 2022: Work Better to strengthen enterprise learning and development.

May 2022:  Insofe, one of the top data science institutes, for  $33 mn.

Dec 2021: Talentedge, an online higher education company, for about Rs 350-400 cr

Nov 2021:  Global Study Partners (GSP), an Australia-based study abroad firm, for $16 mn

Aug 2021: KnowledgeHut, equipping the global workforce with the skills.

May 2021: Impartus, video-enabled learning solutions provider, for Rs 150 cr.

Dec 2020: Rekrut, recruitment and staffing solutions company.