Being an entrepreneur is never a walk in the park. Ask any who has succeeded and the millions who haven’t. There are no easy problems, no easy solutions and no guarantees. Raising funds is just one challenge. Putting those funds to the right use, managing fast-paced growth, generating revenues and keeping the employees cohesive, especially when you cannot meet most of them, like today, are the many others.
The $160 million that Mumbai-based edtech
company upGrad raised in two recent rounds of funding has given it, besides the resources to grow, the confidence that only comes from the first fundraise and the urgency to prove what it has set out to do. Co-founder and Managing Director Mayank Kumar says the fundraise has both added to their stress and relieved it.
As Indian edtech
comes of age, a race of sorts has broken out among the players to become the “Byju’s” of the higher edtech
segment. And now Byju’s, which has hitherto focused on the K-12 (kindergarten to Class 12) segment and competitive exams, has itself entered the higher education space with a $600-million buyout of Singapore-headquartered Great Learning.
As of now, the contenders for the top spot in the segment are upGrad, Simplilearn (its first set of investors exited 51 per cent stake to Blackstone for $250 million) and Emeritus. The question facing those who lead these companies is: How to remain in control even as they race at top speed?
upGrad has decided to tackle its next phase of evolution through three distinct pathways: moving deep into India; acquisitions of start-ups that resonate with its core business; and expanding internationally into new markets and territories.
This is where each of the three co-founders has a unique role to play.
As part of “going deep in India”, the company plans to evolve from a working professionals-focused edtech into one that offers lifelong learning (from age 18 to 55). The spotlight will be on mass degree programmes like BCom, BBA and bachelor’s in various subjects. A study abroad programme, too, has been launched that will help students keep costs down by studying online for one year and then completing the degree on campus.
Rather than through telephony, which the company didn’t find effective enough in tier 2 and 3 cities, the students are being targeted through college partners and counselling associates. In its first month, 200-odd students have come on board this new offering. “We have created an offline distribution network along with the online one,” explains Kumar, whose understanding of India and the aspirations of its small towns is leading the initiative. In charge of all university and college partnerships, meanwhile, is upGrad co-founder Phalgun Kompalli.
The second big area of focus is acquisitions to achieve inorganic growth. When the founders looked around, they saw many small start-ups that had great business ideas but were unable to scale up. Some of these seemed a good fit with upGrad.
So far three acquisitions have been done in a manner that “one plus one is not two but eleven”, says Kumar.
There’s Impartus, its latest buy, that looks at “blended” (offline and online) campus learning. There’s Gate Academy, which allows it to offer coaching for exams for entry-level government jobs, which many fresh graduates aspire for. The academy already has coaching centres in over 50 locations in India. And there’s Rekrut, which works with companies to help them build their human resource pool and through which upGrad can tap private sector aspirants.
“We are looking at acquisitions to offer the products and services that we do not have,” says Kumar.
The next round of acquisitions will include players who offer short certifications and also those that will help expand the company’s global footprint. Co-founder and Chairman Ronnie Screwvala, with his expertise at acquisitions and international exposure, is leading this aspect of the journey.
This is the third theme that is being explored and expanded. So, three CEOs have been hired, one each in the UK, US and Southeast Asia, to grow the upGrad offerings in these geographies and target a global audience.
The company has roughly 2,000 employees, recorded an annual run rate of $120 million for the year ended March 2021, and will cross $500 million in the coming year. The total registered learners will be two million by the end of this financial year, of which 10-15 per cent are likely to be from overseas, up from around 5 per cent currently, thanks to the international push.
Perhaps the biggest struggle — other than managing fast-paced growth — currently being faced is remote working, which Kumar argues may work well for established businesses but is a disadvantage in their situation.
“Productivity, creativity, brainstorming, exchange of ideas, creative juices that flow — all have taken a hit,” he says, adding that many of the employees have not even seen the office, and around 75 per cent are working from home at present. The offline remote working has slowed decision making. On the flip side, what is working in their favour is that there is a lot more conversation and far easier access for them after the fundraise. That said, if he had to trade one for the other, he’d go with being back in office.
Aren’t the founders biting off more than they can chew by firing on all fronts?
“If we fail, it will be called an execution failure. And if we succeed, it will be viewed as a company with great foresight that made the right strategic moves at the opportune moment,” laughs Kumar.
He says when upGrad started off with working professionals and was offering courses across fields like data science, product management, management and digital marketing, the same question was asked of them: Aren’t your fingers in too many pies?
Now, as they watch their baby grow, they can only hope it is on the right path and try to smooth the hurdles along the way. Kumar feels the founders and the team have the “bandwidth” to do so. Whether or not they’ll come through with flying colours is early to say. The course, after all, has only just started.
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