Edtech platform for higher education, upGrad, is considering inorganic growth to expand its footprint in international markets and enter new verticals.
The startup has acquired six companies to date and will hire more than 1,000 employees over the next three months to fuel its growth. It had recently raised $120 million from Temasek Holdings in its first institutional funding and is in the process of raising another $40 million from International Finance Corp. (IFC).
In an interview, upGrad co-founder and president Ronnie Screwvala shares the company’s acquisition strategy as it seeks to launch into short courses. The company expects 40% of its revenue to come from international markets over the next two years. Edited excerpts:
What is your acquisition strategy?
The majority of upGrad courses last between six and 24 months. We want to introduce abbreviated refresher courses ranging from 10 to 100 days, and may consider an acquisition to expand this. In addition, our acquisitions are aligned with our international expansion plans and we will seek to strengthen our presence in the United States, Australia and Indonesia. For international geographies like the United States, we’ll be looking at a build-and-buy strategy, because there’s a lot going on in the edtech space. It’s safe to say that we will build on our own in these markets, while considering acquisitions. Like India, we will continue to focus on higher education in these markets.
What are your plans for international expansion?
By geography, upGrad focuses on Singapore, Indonesia, Vietnam, the United Kingdom, the Middle East, Australia and North Africa, and the United States. By July, we will launch our courses in all geographies and we are currently building teams in the field, recruiting country managers and regional managers. Our international strategy is location-based, as we build localized teams and forces in different geographies.
For products, we will focus on professionals working in these international geographies and offer our full range of services, including certification, diploma and license courses. We will also seek to offer PhD and PhD programs.
In FY22, what segments does upGrad focus on?
For the United States, bootcamps are going to be an interesting and important opportunity to take.
upGrad also focuses on the study abroad segment, where we take a cost-effective hybrid approach to international courses. For the first year and a half, individuals can learn and take courses online at foreign universities, and for the remaining period, take courses on campus, resulting in a considerable reduction in costs.
How will international geographies contribute to your overall revenue in the future?
We estimate that international geographies should contribute nearly 40% of our revenue over the next two years. That said, we continue to build for these international geographies from India and control our costs.
What are your revenue goals for upGrad?
In March, we achieved a monthly revenue rate of ₹100 crore and an annual income rate of ₹1,200 crore. Given the acquisitions (which we have undertaken) and the expansion into new geographies, we expect to achieve a monthly revenue rate of ₹250 to 300 crore by March 2022, and the overall revenue target for the current fiscal year is exceeded ₹3,600 crores (or half a billion dollars).
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