For the Indian media mogul and serial entrepreneur Ronnie Screwvala, the shift from UTV — a multimedia conglomerate he pioneered — to edtech was a rather thought-through process.
“After having moved out of media and entertainment [UTV was sold to Walt Disney in 2012], I was looking for something that I wanted to do in the capacity of an entrepreneur and not as an investor – something that I could start from scratch,” Screwvala recalled the genesis of the edtech platform upGrad, in an interview with DealStreetAsia on the Zoom app.
The startup is now on the verge of launching in Singapore and Indonesia.
It was in 2015 that Screwvala founded upGrad with co-founders Mayank Kumar and Phalgun Kompalli “to bring something to the fore in the field of education, for which I spent the better part of a year researching and understanding the space… meeting tons and tons people,” he reminisces.
Cut to 2021. upGrad made headlines for raising $120 million from Singapore’s state-owned investment firm Temasek early last week, marking its first external funding round. Subsequently, the firm concluded another funding round of $40 million from IFC, a member of the World Bank Group, that brought down the promoters’ stake to 75%.
“Not raising capital earlier was a conscious decision… not that we were bootstrapped, we funded it [the venture] ourselves. The decision allowed us to focus on our vision, because when you get into the funding thing, whether you like it or not, there is a distraction, not just in the process of fundraising but even otherwise.”
upGrad provides online higher education courses for working professionals. Its programmes include digital marketing, entrepreneurship, and data-driven management, among others.
“In the future, several jobs will come up that will require different skills. We want to prepare people for that,” said Screwvala.
By 2025, the World Economic Forum predicts, around 85 million people will lose their jobs, while 97 million new jobs are expected to be created.
“Education popped up every time I thought about what I wanted to do next,” said Screwvala. “It’s a space in which some of my strengths stood out — things like being disruptive, thinking out of the box, and understanding consumers.”
Screwvala once pioneered cable television in India, and built UTV in the 1980s, which became a unicorn when it was acquired by Walt Disney.
Currently, Screwvala is gearing up for his next phase of growth as he carves out upGrad’s expansion plans for the years ahead. Headquartered in India’s financial capital Mumbai, the firm is currently looking to tap the international market, with its immediate focus being on the APAC region and the US.
Going forward, upGrad is looking to launch its online courses in Singapore and Indonesia by June-July this year, said Screwvala. “We’re already in Singapore, we have people there…we have a company registered there, said Screwvala. “We are interacting with the government…we have talked to all the local universities there and are ready to enter the region officially,” he added.
So far, 7-8% of upGrad’s revenues come from the overseas market. “That has been the case right from the beginning. While people want to go in for higher education, sometimes it becomes difficult for them to take a year off and study. So, that’s where the concept of digital medium works, and we get people from all over the world.”
To facilitate its expansion plans in the overseas market, upGrad has put together a global team over the past few months.
While it roped in Zubin Gandevia from FOX Networks Group Asia as its CEO for the APAC region earlier this year, Saranjit Sangar joined the company from Singapore’s Grab Ventures & New Platform Business as its CEO mid last year to spearhead developments in EMEA.
Meanwhile, the company has also appointed Sendy Filemon as its country head for Indonesia; Karan Raturi as its GM, North America; and Brian Saunders as its VP, university partnerships, US.
upGrad claims to have closed FY 2021 with an Annual Revenue Runrate (ARR) of Rs1,200 crore ($165 million), thereby recording a 300% year-on-year growth. Prior to that, for four years, it is said to have enjoyed an annual growth rate of over 100%. Going forward, it has set a target to reach $2 billion in revenue by 2026.
Since its inception, upGrad has tripled its course offerings, hit the ball out of the park on global MBAs, scaled university partnerships, and crossed 1 million learners across over 50 countries, delivered 10 million hours of learning experiences, and closed three acquisitions – two were clocked last year.
In December 2020, it bought recruitment and staffing solutions company Rekrut, while a month before that, it acquired GATE Academy. In 2018, it announced the acquisition of Acadview Software to extend its core value proposition to college learners.
However, it’s not the pandemic alone that has spruced up upGrad’s revenues, stressed Screwvala. “I don’t think the growth that we’ve seen today, which is about 100% each year has come because of the pandemic…. the higher education market has takers who are more long-term in nature… it’s a segment that is right out there, it’s more result-oriented, something that brings a change.”
This is even as one can’t deny that the COVID-19 crisis has also disrupted the higher education space alongside the K12 market that boasts a spate of unicorns such as Naspers and Tiger Global-backed Byju’s, and SoftBank-backed Unacademy.
Going forward, “the higher education market will be at least two-to-three times that of the K12 market just by the sheer size and the disruption,” said Screwvala.
By 2022, online education offerings across grades 1 to 12 are projected to increase 6.3 times to create a $ 1.7 billion market from $265 million in 2019, while the post-K12 market is set to grow 3.7 times to create a $1.8 billion market during the said period, according to an ‘Edtech In India’ report, jointly published by Omidyar Network India and RedSeer.
The post-K12 edtech industry is divided into four segments, each catering to different education needs and outcomes: higher education, technical skilling, test preparation for government jobs, and test preparation for other jobs — they play a critical role in shaping a country’s economic future. “There is ample opportunity for market expansion here,” said Screwvala.
Apart from upGrad, Screwvala runs his own investment firm Unilazer Ventures that he set up in 2012 to bet on the burgeoning startup ecosystem. Besides, he also works with his wife, Zarina Mehta, to manage Swades Foundation, a non-profit outfit, that aims to alleviate rural poverty.