Online higher education pioneer upGrad, has acquired the International School of Engineering (INSOFE), one of the top data science institutes in India, for $33 million in a share swap deal.
As part of the transaction, INSOFE’s management and investors will take a little under 1% equity in upGrad at a valuation of $2 billion.
With this acquisition, upGrad plans an edge in AI and ML courses, which are becoming very popular in India due to rising demand for talent with these skills from corporates and startups.
Founded by Dakshinamurthy V Kolluru, INSOFE offers blended offline-online courses with two big facilities in Hyderabad and Bengaluru. The organisation's unique philosophy combined with excellent mentors, data scientists, and employees ensure that students and clients receive the support to enhance their strengths and work on niche domains to build a long-lasting rewarding career in data science.
With data science applications permeating to different fields, INSOFE believes that all students irrespective of their educational background can pursue a career in data science under the guidance of expert mentors, provided they have the right skill set and a passion for the field.
The company's vision is to be the best place in the world for individuals and organizations to learn and adopt disruptive technologies for solving business and society's challenges.
Commenting on the acquisition, Co-founder and Chairman of upGrad, Ronnie Screwvala, said:
"Insofe is based out of India but stands for global excellence in data science, machine learning (ML), and artificial intelligence (AI). The data and analytics courses do very well for upGrad. So, with this acquisition, we go into the next level of specialisation."
Screwvala further added:
"Upgrad will be a lifelong partner for anyone after K-12. Whether it is undergrad or postgrad, a diploma or a short course, a degree from a top global institute or a doctorate, we want to be the destination of choice. We believe people will be in and out of courses throughout their lives in the future."
“Acquisitions are not for bragging but finding that promoter who is at a good stage in life, has worked 5-7 years building an interesting business but won't be able to take it to 4 or 5 or 10 X in the next two years", he said.
upGrad, co-founded by Ronnie Screwvala, Mayank Kumar, Phalgun Kompalli, and Ravijot Chugh in 2015, offers higher education courses in collaboration with various universities. At present, the upskilling platform has partnered with over 300 universities with a user base of 2 million.
Co-founder and CEO of INSOFE, Dakshinamurthy V Kolluru, commented on the latest development, saying,
"Insofe’s depth in AI and ML coupled with upGrad's partner and student base makes a powerful combination to assume a leadership position in AI education and research worldwide."
The latest deal is upGrad seventh acquisition in the last couple of years. The Mumbai-based EdTech firm had last acquired Work better, an enterprise training company for an undisclosed amount earlier this year.
To supplement organic growth, upGrad has also chosen to pursue acquisitions, carefully handpicking a bunch of companies like Talentedge, Impartus, Knowledgehut, Rekrut India, and Study Partners to help create a meaningful bouquet of courses that will cater to customers' education needs throughout their life stages.
In the near future, upgrad is keeping an eye on raising another round of funds to fuel its international foray and acquisitions.
In response to that, Chairman Screwvala, said that "Yes, we are raising money, but it will take another 45-60 days."
According to Screwvala, in FY22, upGrad’s revenue run rate is expected to come in at $250-$300 million and touch $500 million in FY23.
upGrad entered the unicorn club in August 2021, after raising a total of $185 million from Temasek, International Finance Corporation. Since its inception, the EdTech major has been 100% owned, funded, and run by its co-founders and a capital-efficient business.