After multiple rounds of discussions, five firms have been shortlisted – TPG, Carlyle Group, Kedaara Capital, IFC Venture Capital and CDC Group, two people with direct knowledge of the development told ET.
“The edtech space has seen a massive growth during the lockdown and investors all over the globe are looking at opportunities to invest in this sector. Companies like Byju’s and Unacademy have raised funds at very high valuations already,” said one person.
“So far, Screwvala has invested over $25 million in upGrad and has not raised any equity funding. Now that Screwvala is looking for $100-150 million for the next phase of growth, a lot of investors are showing interest,” said another person who evaluated the plan. Screwvala declined to comment.
The second person confirmed the names of the five shortlisted companies and added that the deal could be signed by the end of this year or mid-January.
“upGrad is looking to close this fiscal with a revenue of 1,200 crore. It’s a massive jump from 20 crore in FY17 to 230 crore in FY20. The funds will help the company in organic as well as inorganic expansion,” the person said.
TPG declined to comment. A CDC India Advisers’ spokesperson said the company does not comment on speculation. Carlyle Group, Kedaara Capital and IFC did not respond to ET’s queries.
Earlier this week, Mumbai-based upGrad entered the test preparation market with the acquisition of Bengaluru-based The Gate Academy for an undisclosed amount.
upGrad said it would invest over 100 crore in the test preparation subsidiary and will develop over 20,000 hours of content in several languages to provide access to at least 1 million test-takers annually.
Founded in 2015 by Screwvala, Mayank Kumar, Phalgun Kompalli and Ravijot Chugh, upGrad provides over 90 programmes on diverse topics.
The company has tie-ups with over 100 universities and institutions including IIT Madras, IIT Bangalore, MICA Ahmedabad, BITS Pilani, Duke CE and Liverpool John Moores University.
upGrad claims it has over half-a-million users globally and over 38,000 of them are paying users.
In August, upGrad raised 50 crore in debt from IIFL Income Opportunities Fund.
The Covid-19 pandemic has spurred the growth of the online higher education sector. A recent RedSeer Management Consulting report predicts that the post-K12 segment (beyond class 12) edtech sector will grow to $1.76 billion in 2022 from $470 million in 2019.
Earlier this week, Unacademy raised an undisclosed amount from Tiger Global Management and Dragoneer Investment Group, valuing the company at $2 billion.