upGrad to acquire higher education firm Talentedge for Rs 400-500 cr

This would be one of the largest consolidations in the Indian Higher education space, in which the No. 1 player in the space is acquiring the No. 4 player

Ronnie Screwvala-led edtech unicorn upGrad has entered into an exclusive agreement to acquire Talentedge (Arrina Education Services, the Holding Company of Talentedge Education Ventures Private Limited), one of India's largest online higher education companies. This would be one of the largest consolidations in the Indian Higher education space. The deal size is pegged at Rs 400-500 crore.

Talentedge is slated to do revenue of over Rs 130 crore this year and double its revenue in the coming year. Sources say the deal value is at 3-4X this year’s revenue.

This acquisition marks the first step in the massive consolidation that is currently occurring through big-ticket acquisitions led by upGrad. upGrad which is currently the number 1 player in this space, is acquiring Talentedge, which is currently the number 4 player in the sector.

"upGrad has cemented its leadership position as the most integrated player in higher education in Asia, serving learners and working professionals across the age group of 18-50 years," said Ronnie Screwvala, chairperson and co-founder, upGrad. “Talentedge has meticulously built a strong business over the last decade and stayed the course in this space where most did not survive and we are very pleased to welcome them at upGrad as we build one of the largest EdTech companies in the world.”

Gurgaon-based Talentedge offers more than 60 courses in partnership with 20+ universities. Talentedge partners with top Indian & International institutes including IIMs, XLRI, MICA, eCornell, UCLA extension among others, and has more than 5,00,000 individual and corporate learners.

"Coming together with upGrad enables us to access their best-in-class products and solutions, technology, and their data-driven pedagogical approach. It's a win-win for learners and employers as a consolidated positioning enables us to serve them better," said Aditya Malik, CEO & MD, Talentedge. “Talentedge will continue to work as is with its University & Institute partners to deliver the quality education to its learners across Degree & Certification programs.”

Gaurav Kumar, president, corporate development and M&A, upGrad said, upGrad’s M&A strategy is to identify companies who share the vision to build a world-class learning organization at scale. “We find the Talentedge team as perfect partners,” said Kumar. “We are in the active stage of closing a few more large acquisitions in India as well internationally which will be announced in the next one to two quarters."

This is important, as upGrad’s M&A strategy is helping it in its vision of becoming an integrated edtech firm. The firm has initiated a merger of its entities, to create one main company in India, to drive its vision for an integrated strategy. Upon the consolidation of the subsidiaries, upGrad will become an integrated higher edtech global player, offering short-form courses, campus programmes and government test preparation courses.

In August this year, upGrad acquired edtech firm KnowledgeHut, which is aimed at equipping the global workforce with the skills of the future through outcome-based immersive learning. With this acquisition, upGrad has ventured into the short duration upskilling and reskilling segment which has a market potential of over $ 58 billion.

Early this year, the firm acquired Impartus (now upGrad Campus) - a leading video-enabled learning solutions provider. In its new avatar, upGrad Campus is targeting higher education institutions and college students, with its learning tools and content. The acquisition is also bolstering upGrad’s presence in the university education space. The aim is to help the youth of Bharat (rural India) learn the necessary skill set to become more employable.

Last year, upGrad acquired Rekrut India (now upGrad Rekrut) - a leading recruitment and staffing solutions company. This is enabling the firm to have complete involvement in the lifecycle of a learner – from education to employment.

Last year upGrad also acquired The Gate Academy or TGA (now upGrad Jeet) - one of India’s premier coaching institutes. The Gate Academy offers the GATE and other entrance tests for various public and government sector jobs. With the acquisition, upGrad made its entry into the test preparation market. This is aligned with the brand’s ambition of rural India penetration strategy in making Bharat employable.

In August this year, upGrad said it has raised a total of $185 million at a value of $1.2 billion, making it the member of the coveted unicorn club. The firm crossed $210 million annual revenue run rate (ARR) in September this year. It is on track to achieve a $500 million ARR in March 2022.

upGrad competes with players such as Simplilearn, Udemy, Coursera, Edureka, Byju’s, Vedantu and Unacademy. It is tapping a huge opportunity. According to the World Economic Forum (WEF), by 2025, around 85 million people will lose their jobs. However, over the same period, 97 million new jobs will be created, these will require very different skills. Without the ability to reskill people quickly, and at scale, millions will potentially be displaced from work.