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Indian edtech firms ramp up overseas acquisitions in global expansion push

Written by Moulishree Srivastava Published on     3 mins read

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In the first nine months of 2021, Indian edtech startups raised USD 3.3 billion compared to a total of USD 2.22 billion in 2020.

Flushed with billions of dollars of venture capital, Indian edtech firms are scooping up overseas peers as they gear up to corner the global online education market.

On Monday, Mumbai-based online higher education startup upGrad—which crossed the billion-dollar valuation earlier in August—said it has signed an acquisition agreement with Global Study Partners (GSP), Australia’s leading study abroad startup that allows international students to search, compare, and apply for thousands of courses globally on its online platform.

upGrad will buy a 100% stake in GSP for USD 16 million and invest a further USD 10 million for future growth. Founded in 2015 by Elaine Starkey,  Sydney-headquartered GSP links international students with more than 600 education institutions across Australia, New Zealand, the US, Canada, the UK, and Ireland through education agents and channel partners.

GSP is set to close its current financial year ending June 2022 at a GMV of over USD 10 million, which is expected to grow fourfold over the coming year, upGrad said. GSP marks the first international acquisition by upGrad, which has bought seven companies since its inception in 2015 and strengthened its position in the study abroad segment.

“Study abroad (segment) is a key growth initiative for us—not just out of India but also for our learners internationally. GSP coming into upGrad’s fold will be a needle mover for us to attain a head start in being a global leader in this segment too,” said Ronnie Screwvala, chairperson and co-founder of upGrad.

According to Bengaluru-based consulting firm Redseer, the number of Indian students opting for higher education abroad will double by 2024 to about 1.8 million, who would be spending USD 75–85 billion overseas.

“With 150,000 students every year, Australia is one of the biggest destination markets for Indian learners,” Gaurav Kumar, upGrad president of corporate development and M&A. “We are looking to build a revenue of USD 100 million in our study abroad business in the next three years.”

In July, Temasek-backed upGrad, which offers upskilling courses for students and working professionals, earmarked USD 250 million for M&A and non-linear growth. The six-year-old startup, set up by veteran entrepreneurs Ronnie Screwvala, Mayank Kumar, and Phalgun Kompalli, had been bootstrapped by its co-founders until earlier this year. With offices across the UK, the US, Middle East, India, Singapore, and Vietnam, it has so far raised USD 185 million.

upGrad isn’t the only Indian edtech eyeing global educational platforms to grab an international user base and fuel growth.

Bengaluru-based Byju’s, the world’s most valuable edtech at USD 18 billion, acquired two California-based education startups—reading platform Epic in a USD 500 million cash-and-stock deal and creative coding platform Tynker for an estimated USD 150–200 million.

Similarly, online executive education firm Eruditus—one of the oldest edtech players in India—spent USD 200 million in May 2021 to acquire iD Tech, a California-based kids-focused startup to strengthen its global presence. Eleven-year-old Eruditus, which raised USD 650 million in a Series E financing round at a valuation of USD 3.2 billion earlier in August, is present in the US, Brazil, Europe, the UAE, China, as well as in a few Southeast Asian countries. The company reportedly plans to use the fresh capital to fund acquisitions across India and abroad.

The trend is likely to gain momentum as local edtech startups continue to enjoy investors’ attention, after China’s crackdown on domestic edtech firms earlier this year. In the first nine months of 2021, Indian edtech startups raised USD 3.3 billion, as per a report by Venture Intelligence and PwC, compared to a total of USD 2.22 billion in 2020—which is considered a record funding year for local online education firms.

Acquisition sprees internationally by local edtech companies are in line with the broader trend of local unicorns stepping up investments in global startups.

“Indian unicorns are looking at international startups having use cases similar to their own to co-innovate, integrate, and cross-sell their offerings and products,” said US-based management consulting fund Zinnov in a recent report.

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