Ronnie Screwvala's upGrad breaches Rs 1,200-crore annual revenue rate

Clocks revenue of Rs 100 cr in March; set to acquire two start-ups to strengthen presence in higher education sector

By tripling down on its course offerings, scaling university partnerships, and putting together a crack team in India and across the globe, Ronnie Screwvala-founded higher education start-up upGrad has achieved an annual revenue rate (ARR) of Rs 1,200 crore for the financial year 2020-21 (FY21).

The start-up, which saw a 100 per cent revenue growth last year, is now targeting 150 per cent revenue growth in 2021 with profitability in sight. The company clocked revenue of Rs 100 crore in the month of March 2021. “We will break even in the coming quarter, with growth coming from the core business, which includes upskilling working professionals, giving a push to undergraduate degrees, as well as collaborations with Indian and foreign universities,” said Screwvala.

According to financial data accessed from business intelligence platform Tofler, the company’s losses had widened to Rs 79 crore in financial year 2019-20, as compared Rs 43 crore in the financial year 2018-19.  “Many have said 2020 was a break out year for edtech, but on the contrary, I can clearly see higher education hitting its massive inflection point once the pandemic settles down. At upGrad, we are building on what will not change for the next many decades — the future of online and lifelong learning. That allows us to build a global company,” he added.

The company, founded by Screwvala, Mayank Kumar, Phalgun Kompalli, and Ravijot Chugh in 2015, has set a $2-billion revenue goal by 2026. “In 2021 and 2022, we will be linking all the dots in lifelong learning — from anyone entering college, all the way to retirement, and everything in between. The consolidation of our international expansion and strategic acquisitions will further fuel non-linear revenue growth in 2021,” said Screwvala. 

upGrad is in the process of acquiring two start-ups in the next 50 days, which would add further tailwinds to the company’s growth. It had, last year in December, acquired recruitment and staffing solutions company Rekrut India. The acquisition is said to have brought upGrad a network of over 100 recruiting experts who work closely with many corporates, micro, small & medium enterprises, as well as large enterprises. Besides, upGrad also acquired a Bengaluru-based coaching institute, The Gate Academy, in November 2020 to enter the test preparation market. Screwvala said these two start-ups will contribute between Rs 60 crore and Rs 100 crore to its overall revenue this year.

It has set aside a corpus of Rs 350-500 crore for the acquisition and growth of its inorganic bets this year. Short-form courses, study abroad and career counselling are some of the other areas it is focusing on for expansion.

Even though the firm has a presence in over 50 countries offering over 100 courses in areas such as data sciences, technology, management, law, arts, finance, marketing, and human resource, India accounts for over 90 per cent of the company’s revenue. upGrad will now be focusing on revenue growth in international markets, for which it has beefed up its global leadership team with the hiring of ex-Grab leader Saranjit Sangar as CEO — EMEA, ex-Disney chief Zubin Gandevia as CEO — APAC, followed by developing the four-member board for its UK operations and appointment of more leaders to drive business and university partnership across the US and Indonesia. It is targeting a revenue of 20-25 per cent from the current 8 per cent from international markets by 2023.

The company, which has so far not raised any external funds, will also be raising a VC round in the next 30-45 days, said Screwvala. According to reports, upGrad has been in talks with Singapore-based sovereign wealth fund Temasek and World Bank’s International Finance Corporation to raise $100 million, which would value it at around $500 million.