Upskilling platform upGrad bought New Delhi-based online learning platform Harappa Education for $38 million (about ₹296 crore) in a cash-and-share swap deal, in its ninth acquisition so far.
Mumbai-based upGrad, which expects to record gross revenue of $500 million this financial year, closed the transaction with Harappa shareholders, Bodhi Tree Systems (a newly launched platform between James Murdoch and Uday Shankar) and co-founders Pramath Raj Sinha and Shreyasi Singh. All of them have joined the upGrad cap table.
“With our limited presence in the enterprise business-to-business (B2B) ecosystem, Harappa coming in allows us to establish a leadership position in the entire sort of B2B enterprise learning space...Harappa has built a unique pedagogy product and can make strong impact in the learning outcome for various learners,“ Mayank Kumar, co-founder, upGrad, said in an interview.
For us, having established ourselves in the direct-to-consumer (D2C) space as most of our revenues come from D2C and B2C ecosystem, Harappa has a very strong presence in the B2B and enterprise learning space, he added. Harappa was founded in 2018 by Sinha, founding dean of the Indian School of Business (ISB), and founder trustee of Ashoka University, and Shreyasi Singh, former editor of India Inc.
The company targets young professionals irrespective of their area of specialization to offer self-paced courses in an attempt to address the issues of poor employability, inadequate leadership and an ill-equipped workforce. It has an active clientele of 100 mid- and large-sized organizations. It also has tie-ups with colleges to improve students’ communication skills and make them workplace ready.
“As a combined force, Harappa and upGrad will anchor our purpose and conviction to create a truly wholesome learning ecosystem for lifelong learners in India and abroad, with our time-tested pedagogy, flagship programs and rich partnerships to guarantee unmatched outcomes for our learners and clients,” said Sinha and Singh in a joint statement.
Harappa aims to turn profitable in the next financial year.
This year, upGrad has made four acquisitions so far, including Harappa, taking the total tally to nine deals including last week’s purchase of Wolves India, a Bengaluru-based recruitment and staffing platform. It had earlier bought INSOFE, Work Better, Talentedge, Global Study Partners, KnowledgeHut, Campus and Rekrut. Kumar said upGrad aims to deepen its positioning in the Indian business-to-business (B2B) and enterprise learning space.
“There may be more acquisition that may come in this domain...We are also looking at interesting assets in the study abroad space,” he said.
The edtech firm is also eyeing some international acquisition opportunities with upGrad co-founder Phalgun Kompalli having shifted to the US to work out on the operations and future deals, Kumar added.
upGrad Education Pvt Ltd, which runs the upGrad platform, was founded in 2015 by Ronnie Screwvala, Kumar and Kompalli. In August last year, the company joined the coveted unicorn club with $1.2 billion valuation.
The professional skilling platform has been bullish on its acquisition strategy to grow its user base and adjacencies in other verticals including test-prep through the acquisition of The Gate Academy, recruitment and staffing platform Rekrut in 2020.
The edtech industry, which boomed during the pandemic as teaching moved online, has witnessed major funding crunch and moderation in valuations with the reopening of educational institutions and physical schooling.
With a focus on conserving costs, several have resorted to mass layoffs and trimming discretionary spending.
Over the past several months, edtech unicorns Byju’s, Unacademy, Vedantu and other smaller players such as Lido Learning, FrontRow, Udayy, and SuperLearn, among others have either fired or asked hundreds of employees to leave as they shut some of their operations to cut costs.
Besides edtech, the broader startup ecosystem has also suffered large layoffs with companies like FrontRow, Meesho, CityMall, Mobile Premier League, Cars24, MFine, Furlenco and Trell firing employees over the past few months.
Kumar said a large part of the stress in the edtech space has been in the online K-12 segment and said that upGrad will continue to be bullish in its space.
