Mumbai’s educational technology unicorn upGrad, supported by investors like Temasek, is in the final stages of discussions to acquire American education company Udacity. To facilitate this deal, upGrad is actively seeking to raise up to $100 million. A significant portion of this funding, approximately 80%, is designated specifically for the acquisition.

Ronnie Screwvala, upGrad’s founder and major shareholder with a 22.4% stake, is set to contribute personal funds to this round of financing. The firm is also reaching out to new investors for an estimated $50-60 million, while existing backers are expected to contribute the remainder.

The financial details of the deal suggest that upGrad’s valuation will remain stable at around $2.5 billion, matching its previous evaluation. Founded in 2015 by Screwvala, Mayank Kumar, Phalgun Kompalli, and Ravijot Chugh, upGrad collaborates with universities to provide higher education and skill development courses. Its notable investors include Temasek, Murdoch’s Lupa Systems, International Finance Corporation, and IIFL.

Udacity, based in California, offers a range of courses including data engineering, business analytics, artificial intelligence, data science, and product management. The acquisition deal, initially speculated at $100 million, is now set at approximately $80 million. Advanced due diligence is currently underway, with legal teams deeply involved in the process. This new round of financing is directly linked to the Udacity acquisition.

upGrad recently reported a significant revenue increase of 96%, reaching INR 1,194 Cr in FY23, up from INR 608 Cr the previous year. This growth is attributed to an expansion in its paid learner base. The company also announced that its total learner count surpassed 10 million in FY23, with a 54% year-on-year growth in paid learners.

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