Media industry veteran Ronnie Screwvala's U Education Management Pvt. Ltd, which runs ed-tech startup UpGrad, is set to raise around $40 million (Rs 266 crore) in its first round of external funding, a company statement said.
The Mumbai-headquartered company confirmed to VCCircle that there was interest from investor groups to raise the above-mentioned sum for a 10% stake, but refrained from naming these investors.
The company said the funds will be used to build a global tech platform, apart from investment in courses, content facilities and studios, as well as online and offline marketing. It will also create 50 offline centres for engagement and networking.
Started in January 2015, UpGrad targets working professionals with online courses in entrepreneurship, digital marketing, data analytics and product management. Apart from Screwvala, UpGrad's co-founders include Mayank Kumar, Ravijot Chugh and Prabhav Phalgun, “With the speed at which our working professionals in India need the ‘Upgrading’ and ‘Upskilling’, there is no choice but to look at things exponentially," said Screwvala. "Personally, I do believe that equity is the most valuable asset at this juncture of UpGrad and hence we are taking a cautious step towards this dilution (of 10% stake).”
The announcement comes amid plans to take UpGrad to the UAE and Southeast Asian markets.
The company has thus far been internally funded by Screwvala's proprietary arm Unilazer Ventures, which he set up in 2012 after selling UTV to Disney. It has so far backed 30 startups, including Lenskart and Niki.Ai.
Last May, Screwvala told VCCircle that he hadn’t made any fresh investments for two years and his entire focus was on his own ground-up business, UpGrad.
The founder group had committed to invest Rs 300 crore in UpGrad, with co-founder Mayank Kumar telling VCCircle last July that Rs 100 crore had been invested till that juncture.
He had said that the company would not look at external funding unless the collaboration was strategic in nature.
The three-year-old company currently has tie-ups with the institutes such as IIT Bangalore, BITS Pilani, IMT Ghaziabad, SPJIMR, MICA Ahmedabad, and UK's Cambridge University among others.
Screwvala sees a Rs 75,000 crore opportunity waiting to be tapped in the "massively underserved" category.
“Looking at the size and potential of the ed-tech market in the very immediate future, there is a job creation and specific opportunity for at least 1 million jobs each across data, management and software development and coding," said Screwvala. "That’s 3 million jobs with an average cost of Rs 2 lakh for online courses.”
Upgrad says it will hit a revenue run rate of Rs 250 crore and a student run rate of 8,000 in March this year, with Kumar saying earlier that the company hopes to turn profitable by that point.
UpGrad had in October 2016 acqui-hired Pyoopil Education Technologies Pvt. Ltd, marking its entry into the corporate training space.