[Funding] upGrad raises $120 Mn from Temasek in first external round; valuation soars $600 Mn

Edtech startup upGrad has raised $120 Million (Rs 900 crores) from Singapore's sovereign fund Temasek in its first external fundraising. The 6-year-old startup now values at $575-675 million after the funding, the company claims. The company aims to use the funds to scale its operations in international markets, pursue mergers and acquisitions in the edtech space. It further aims to expand its graduate and postgraduate degree portfolio.

“This capital will further fuel our commitment towards global expansion as well as deeper India penetration, as we march forward with our goal of making India the teaching capital of the world,” said the company founders in a joint statement. That is, besides acquisitions, the fresh infusion of capital will go into expanding upGrad's presence into the US, UK, Middle East and the Asia-Pacific. In the last six months, the edtech firm has also set up a ground presence in the Asia-Pacific region.

The online education segment has seen a large rush of risk capital following the Covid-19 epidemic. As the segment gears up for a push, test preparation, K12 learning, online certification and skill development will be the major drivers of demand. In the segment - Byju's, which focuses on the K-12 segment and Unacademy focuses on test preparations - are already Unicorns. Ronnie Screwvala, in an interview with ET, suggested that upGrad will raise another round in the coming months. “We are not quite a unicorn but we’ll get there soon,” he said.

About upGrad

Ronnie Screwvala, Mayank Kumar, Phalgun Kompalli and Ravijot Chugh founded the company in 2015. The edtech startup offers higher education courses in collaboration with various universities. It claims to have a million users globally with 45,000 paid learners. The startup currently has an annual revenue run rate of $165 million. Further, Screwvala said sales are doubling every year and the firm is targeting $2 billion in revenue by 2026.

In 2020, upGrad acquired recruitment and staffing solutions company Rekrut India and Bengaluru-based coaching institute The Gate Academy (TGA). In August 2020, the company also raised INR 50 Cr debt from IIFL Income Opportunities Fund.