Ronnie Screwvala-led edtech unicorn upGrad records 10 mn enrolled learners

upGrad is evolving to become Asia's largest integrated learning, skilling, and workforce development and placement company

Nine years ago Mayank Kumar received a message from serial entrepreneur Ronnie Screwvala for a meeting to understand the problems that can be solved in the education sector and potentially start a venture in the space. Kumar, at that time, was a vice president at Bertelsmann India Investments and managed direct investments in the digital, tech, media, and education areas. He shared his insights with Screwvala about the education sector in the country including the opportunities as well as challenges. For the next four months, Kumar didn’t hear anything from Screwvala, who is known for pioneering cable television in India in the 1980s and then building a unicorn that was acquired by Walt Disney Co.

“Four months later, Ronnie (Screwvala) pinged me again saying, ‘would you be open to starting something on your own?” says Kumar, who is now the co-founder and managing director of edtech unicorn upGrad. “During the initial six months before the inception of upGrad, I used to travel to Mumbai regularly, have a conversation with Ronnie and we fleshed out the idea to start upGrad,” says Kumar who also brought two other co-founders onboard--Phalgun Kompalli and Ravijot Chugh-- and launched upGrad in 2015.

upGrad is now evolving to become Asia’s largest integrated learning, skilling, and workforce development and placement company. The firm has now recorded the milestone of crossing the mark of over 10 million enrolled learners since inception across “One upGrad.”

“We started with the belief that we want to build something at scale and have a high impact. We did not think that we could (cross) 10 million or 20 million (students) in that process,” says Kumar. “We  (now) want to be the (largest) integrated learning, skilling, and workforce development company.”

To achieve that upGrad is focusing on three pillars of growth. These include careers and skilling, study abroad, and business-to-business and enterprise learning programmes.

upGrad competes with players such as Simplilearn, Coursera, 2U, edX, Chegg, Skillsoft, and Byju's-owned Great Learning. The firm’s service is present across  20 countries and it has over 1000 university partners. The firm generates 75-80 per cent of its revenue from its business-to-consumer segment. The remaining 20-22 per cent is coming from the business-to-business area.

upGrad Education Private Limited reported its consolidated revenues for the financial year 2021-22 as Rs 692 crore, a 111 per cent increase from Rs 328 crore in the previous financial year. The company’s consolidated net loss widened almost three times to Rs 627 crore during the same fiscal compared to Rs 211.1 crore last year, according to data accessed by the business intelligence platform, Tofler. The company’s losses mainly grew due to a significant rise in expenses during FY22. The total expenses for the fiscal were reported as Rs 1,319 crore in FY22, a jump of 157 per cent from Rs 514 crore last year.

However, the firm is expecting to grow its annual revenue run rate by at least 50 per cent during FY24 compared to the previous fiscal. Kumar also said the goal is to be profitable by the September quarter.

“We are at an annual run rate of about $350 million to $400 million,” says Kumar. “We would like to exit the current financial year which is FY2024 at about $500 million to $600 million run rate.”

upGrad is expanding in the Asia-Pacific, North America, and select European markets owing to the demand and the business-ready environments. The firm is also witnessing an uptick in the number of working professionals skilling themselves amid massive layoffs in the tech sector. In the last two years, working professionals' intent towards science, technology, engineering, and mathematics (STEM) courses has increased by 54 per cent at upGrad, thereby also highlighting the job market trends. upGrad said that placements grew by over 190 per cent since the last financial year. 

The company has raised a total funding of about $668.2 million from investors. Last year in August, it raised a $210 million funding round from marquee investors and Family Offices, at a valuation of $2.25 billion. The investors included Bodhi Tree (a JV of James Murdoch & Uday Shankar), the family office of Bharti Airtel, Narotam Sekhsaria family office (Ambuja Cements and ACC), and Artian Investments (the family office of Lakshmi Mittal - ArcelorMittal)

The funding is helping it to fuel its M&As (mergers and acquisitions) strategy, to acquire various companies in markets such as the US and Southeast Asia. Last year upGrad acquired companies such as Centum, Harappa Education, Insofe, and Work Better.

Kumar said this year also the company would be looking at inorganic growth, especially in the global markets. 

Ahead of an initial public offering (IPO) planned for 2024, the company last year also chose to streamline the corporate structure and expense out all costs related to mergers and acquisitions (M&As) and growth capital in FY22 and partly in FY23. Over 15 co-founders from its M&As joined the leadership team. The firm also set up teams in Singapore, San Francisco, Indonesia, New York, West Asia, and London and was looking to hire people as faculty, trainers, and experts. In India, upGrad announced plans to consolidate all its M&A under the rubric of “One upGrad” by March-June 2023.

“Right now, our main focus is hitting profitability,” says Kumar. “And ensuring that the entire ecosystem of upGrad companies gets consolidated.”