Ronnie Screwvala, co-founder and chairman of Indian edtech firm upGrad, said investors of India’s most valued edtech company have to take equal accountability as the founders when fire-fighting on a range of issues.
Without mentioning the name of the company, Screwvala, in a fireside chat at DealStreetAsia’s Asia PE-VC Summit 2022 in Singapore, said, “At a time like this, the biggest disservice that has happened to edtech in India is that investors in the same company have not spoken up. If they know everything is fine, we haven’t heard all the early investors who took billions of dollars off in secondary valuations in that company actually go out there and speak in favour of the company. So I think that’s where founders are left high and dry.”
As the demand for online education slows and investor confidence wanes, edtech startups, which were once the darlings of investors, have been facing a funding crunch and resorting to drastic steps, including layoffs, to stay afloat. According to data from DealStreetAsia’s DATA VANTAGE, edtech startups in India raised $290.4 million in Q2 2022, which is 80% lower than the $1.4 billion amassed in the preceding quarter.
The situation has been especially bad for India’s most valued edtech and also the biggest loss-making unicorn, BYJU’S, which has been under pressure from not only its investors and customers but also from the media, caught in the crosshairs of widening losses, flat revenue, rising expenses and regulatory hurdles, among others.
Mumbai-based upGrad, however, has come across as an outlier, spanning several segments from test prep to overseas education and undergraduate degrees to campus courses in 250 universities. Its offerings include finance, law, business and software courses for the 18-60 age group. Screwwala said upGrad is profitable and breakeven at the core level.
Screwvala founded upGrad in 2015 with Mayank Kumar and Phalgun Kompalli, and has led the company to become of the biggest edtech firms in India. With the latest funding of $210 million, upGrad aims to continue its shopping spree, already having six companies in its kitty so far this year, including test-preparation startup Exampur and recruitment, staffing company WOLVES India. Most recently, the company acquired corporate training solutions company Centum Learning, a unit of Bharti Enterprises Ltd, in a share-swap deal.