Upgrad to raise $40M in funding from IFC
Upgrad has closed another funding round of $40 million from the World Bank arm IFC, reducing the promoters’ stake in the company to 75%. It had recently raised $120 million from Singaporean investor Temasek Holdings.
The capital infusion of $160 million in two quick rounds takes the startup closer to unicorn status, valuing the Mumbai-based company at $850 million. This is the second external funding for the company.
Upgrad was founded in 2015 by Ronnie Screwvala, Phalgun Kompalli, Mayank Kumar, and Ravijot Chugh by investing over Rs 170 crore, most of which was from Screwvala.
Commenting on the investment, chairman and co-founder Screwvala said, the work we do has been well-acknowledged by the $160 million funding from two of the very renowned global investors this week, USD120 million from Temasek this Monday and $40 million from the IFC today. That the International Finance Corporation (IFC) has chosen to invest in us is a big reflection of the work we do.
The IFC funding also reflects the great synergies between their investment philosophy and our work, he said.
Screwvala said it may take six more weeks for the investment to close and presently, they are finishing the legal formalities. In January, the IFC had itself made the customary intimation to the government (foreign ministry).
On the equity infusion through the two funding rounds, Screwvala stated the three promoters (excluding Ravijot Chugh ) still retain nearly 75%, of which he owns 60%, and the other two co-promoters will hold around 15% and two external investors between them the remaining 25%.
When asked if Upgrad could meet the target for FY21 with a monthly revenue run rate of Rs 100 crore, Screwallah answered in the affirmative, saying the FY21 numbers are more than Rs 1,200 crore. It had closed FY20 with a revenue run rate of Rs 230 crore only.
Screwallah declined to take the company public saying at Rs 1,200 crore of revenue run-rate, we are too small for the equities market.
“I know both the advantages as well as the disadvantages of running a publicly-traded company and I feel one need to have a critical mass to take a company public (his UTV was acquired by Disney at an enterprise valuation of $1.4 billion in 2013). And therefore, we are focused on further building our growth in the coming years,” he said.
upGrad is rapidly expanding its business by raising funds. This will greatly help the company in competing with its competitors.Shishir Gupta, Founder and CEO, StartupLanes
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