Upgrad founder Ronnie Screwvala
Upgrad Education, led by founder Ronnie Screwvala, is in the advanced stages of acquiring US-based online education firm Udacity. The Mumbai-based edtech company is also in discussions to raise up to $100 million, with approximately 80% of this funding earmarked for the Udacity acquisition. Screwvala, holding a 22.4% stake in Upgrad, plans to invest personally in this round. The company aims to secure $50-60 million from external investors, with the remainder coming from existing investors, including Temasek.
The acquisition, which began discussions last year, sees Upgrad likely purchasing Udacity for around $80 million, a slight decrease from the initially discussed $100 million. This deal aligns with Upgrad’s strategy to expand internationally and enhance its reskilling offerings. Upgrad’s valuation is expected to remain at its last assessment of $2.5 billion, reflecting the broader reset in technology and edtech valuations globally.
Despite the challenging environment for India’s edtech sector in 2023, Upgrad has maintained strong financial performance. It reported a 96% revenue increase to Rs 1,194 crore in the financial year ending March 2023, although losses grew by 67% to Rs 1,142 crore. Since its inception in 2015, Upgrad has raised $365 million, with the latest $36.4 million through a rights issue in March 2023. Notable investors include Bodhi Tree, a joint venture involving James Murdoch and Uday Shankar.
Udacity, founded by Sebastian Thrun and last valued at $1 billion in 2015, specializes in courses like data engineering, business analytics, and artificial intelligence. Its enterprise segment is the largest revenue contributor, though it faces retention challenges. Upgrad’s acquisition aims to fortify its position in the competitive edtech landscape, leveraging Udacity’s offerings and customer base.
