Singapore’s sovereign wealth fund, Temasek, has made an additional investment of $60 million in Upgrad, an upskilling and higher education startup, maintaining a valuation of $2.25 billion, according to a report by The Economic Times.
In a separate development, Upgrad’s founder and chairman, Ronnie Screwvala, has acquired Bharti Enterprises’ stake in the company for $20 million. Bharti Enterprises had held a 1 per cent stake in Upgrad following the latter’s stock-swap acquisition of Centum Learning in 2022.
Ronnie Screwvala’s increased role
Screwvala, a seasoned entrepreneur known for founding UTV, now possesses a 45 per cent stake in Upgrad and is expected to take on a more significant role following the departure of co-founder Mayank Kumar, the report said.
The report quoted a source as saying that the funding has been finalised, and Ronnie’s increased stake underscores his commitment amid recent changes and his more active involvement going forward.
This positions Screwvala as one of the few entrepreneurs with a substantial shareholding in a venture-backed startup, with Temasek and IFC listed among the company's key investors, the report said.
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Currently, Upgrad is generating approximately Rs 600 crore in quarterly revenue, equating to about Rs 2,400 crore for the current fiscal year, as mentioned by a source.
Screwvala boosts Upgrad IPO plans
Screwvala’s return aligns with Upgrad's IPO plans in India, and his enhanced engagement may positively influence public market investors. The total funding round for Upgrad amounts to $80 million, including the secondary transaction between Bharti Enterprises and Screwvala, making it the third-largest funding in the edtech sector amidst ongoing challenges in the industry. In September, PhysicsWallah secured $210 million in funding, while Eruditus raised $150 million at a flat valuation of $3.2 billion.
Before this equity funding, Upgrad also completed a $35 million debt financing from Evolution X, a joint venture between DBS and Temasek, the report mentioned.
So far this year, edtech startups have collectively raised around $650 million, a notable decrease from the peak of $4.1 billion in 2021 driven by the pandemic. However, this figure is still higher than $315 million raised in the entire year of 2023, reflecting a continuing downturn in fundraising within the sector, the report said.
Growth in enterprise revenue
A report from Upgrad investor 360 One said, “Enterprise revenue growth is robust and the order book is Rs 104 crore in Q4 FY24. Upgrad turned profitable in skilling and reskilling business and placement services business in Q4... Consumer segment customer acquisition cost improved from 30 per cent in FY23 to 22 per cent in FY24. Non-university programme revenue in Q4 FY24 is up by 22 per cent Q-o-Q and 81 per cent Y-o-Y.”
Upgrad collaborates with over 20 Tier-I and Tier-II universities, providing more than 70 courses across various fields, including data science, management, digital transformation, technology, and law.