Edtech startup upGrad today announced the acquisition of US-based edtech firm KnowledgeHut for an undisclosed sum. Post-acquisition, KnowledgeHut will operate as a wholly-owned entity of upGrad.
Knowledgehut, an upGrad Company, expects to surpass Rs 300 crore in revenue next year, with North America, the Middle East, and South-East Asia accounting for 65% of total revenue.
The move came just a few weeks after upGrad set aside $250 million for mergers and acquisitions to fuel non-linear growth over the next seven to nine months.
“With KnowledgeHut on board, our focus on being an integrated ‘LifeLongLearning’ partner for powering career success for the global 1 billion workforces just got stronger. KnowledgeHut’s presence in over 70 countries will further upGrad’s ambition of liberalizing quality online education around the world,” said Ronnie Screwvala, upGrad Chairperson and Co-Founder.
KnowledgeHut, founded in 2011 by Subramanyam Reddy, has trained over 2,50,000 professionals and empowered over 500 businesses to build the skills that drive results, with a product offering of over 200 courses in high-demand areas.
KnowledgeHut’s next-generation flagship learning experience platform, PRISM, will provide learners with a scalable and immersive learning model.
It will become a wholly-owned subsidiary of upGrad following the acquisition. In his new role as CEO, Reddy will be at the helm.
KnowledgeHut, according to Reddy, is driving outcome-based immersive learning for global technologists and the broader professional community by focusing on short-term professional upskilling.
“Given our position in global markets, this synergy with upGrad will further strengthen and support that vision. The acquisition paves the way for upGrad to empower B2B customer segments across geographies including the US and the Asia Pacific,” he added.
Upgrad Education Private Limited is a provider of online higher education. Data sciences, digital marketing and communication, product management, and software development programs are all available on its platform.
UpGrad intends to join the unicorn club by investing an additional $400 million. For the upcoming fundraising, the company is in talks with global private equity and venture capital investors.
The company employs over 400 people and expects to hire another 100 or so in fiscal year 21. To capitalize on potential opportunities in the online education sector, the company recently strengthened its senior leadership team.
Since its inception in 2015, upGrad has raised its first external equity funding round, led by Temasek, in April 2021. UpGrad raised INR 50 crores ($6.8 million) in debt from the IIFL Income Opportunities Fund in August 2020. (owned by IIFL Asset Management Limited, an India-focused global asset management firm).
In the company’s first external funding round, upGrad received $40 million from the World Bank’s IFC and $120 million from Temasek. UpGrad has a market capitalization of $850 million. By 2026, the company hopes to generate $2 billion in revenue.
Coursera, Edureka, Simplilearn, and Unacademy are upGrad’s main competitors.
However, there are some features that distinguish Grad from its competitors. One of the main USPs is the one-on-one attention given to each learner. This is known as ‘student mentorship,’ and the team behind it is known as ‘Student Success’ at upGrad.