Byju’s India rival UpGrad earmarks $250m for acquisitions

India-based edtech firm UpGrad has set aside US$250 million for mergers and acquisitions over the next seven to nine months.

The firm has already identified segments as well as target companies that it could pursue as potential investment opportunities. The company expects to announce two M&As within the next 60 days.

UpGrad co-founders (from left to right) Phalgun Kompalli, Mayank Kumar and Ronnie Screwvala / Photo courtesy: UpGrad

“Outside of cash, we see a very strong value currency in our stock to look to merge or acquire companies with exceptional founders who will join us as fellow entrepreneurs to build this out over the next decade,” UpGrad co-founder and chairman Ronnie Screwvala said in a statement.

According to Screwvala, the company will focus on short-form learning startups, tap potential markets such as Africa, Indonesia, and Vietnam, and aim for a bigger play in the coaches-and-mentors ecosystem.

The announcement comes after UpGrad secured US$120 million from Singapore state-owned firm Temasek in its first-ever external fundraising in April.

The round gave the edtech firm a valuation of around US$575 million to US$675 million. Screwvala had said at the time that UpGrad was not too far from attaining the unicorn status.

Last month, UpGrad said it was looking to raise up to US$400 million at a US$4 billion valuation in the second half of this year.

The company also outlined its plans to focus on markets outside India. It said that about 25% of UpGrad’s international students had enrolled from North America.

Indian edtech firms have been eyeing international expansion plans recently. In May, Indian edtech major Byju’s launched its platform in markets including the US, UK, Australia, Brazil, Indonesia, and Mexico.

UpGrad and other Indian edtech firms have seen an exponential rise as students relied heavily on online educational tools during the Covid-19 pandemic and stay-at-home norms.

According to a report by Tracxn, the online learning space in India received US$2 billion in funding last year.

The positive growth has also encouraged key market players like Byju’s, Unacademy, and UpGrad to go on an acquisition spree in order to shore up growth.

In May, UpGrad acquired video-enabled learning solution platform Impartus for about US$20.6 million. The market is likely to consolidate further with more mergers and acquisitions on the horizon.