Education Technology start-up, upGrad is a Mumbai-based start-up that offers online course certification for subjects like product management, data sciences, digital marketing, software development and Machine Learning amongst many more.
Recently on 24th November, upGrad announced to buyout 100% stake in GATE coaching start-up, THE GATE ACADEMY (TGA) for an undisclosed amount.
For those of you who don’t know, GATE stands for Graduate Aptitude Test in Engineering. The academy is run by IISc and IIT alumni.
upGrad mentioned in the announcement that this is the beginning of their Mergers and Acquisition spree which is planned for the next three years, The Gate Academy was the first acquisition in the line-up.
upGrad was founded back in 2015 by first-gen entrepreneur, philanthropist and movie producer- Ronnie Screwvala along with co-founders- Ravijot Chugh, Phalgun Kompalli and Mayank Kumar.
According to sources, the edtech start-up also plans to fund The Gate Academy with INR 100 crore investment and aims to develop over 20,000 watch hours of content in multiple Indian languages. This business plan will benefit The Gate Academy by providing it with the opportunity and allowing access to over a million GATE test applicants in a year.
How does upGrad benefit from this merger?
Ronnie Screwvala, co-founder, upGrad says, “TGA provides upGrad a non-linear growth opportunity in new-segment entry and deeper penetration in the semi-urban and rural markets, which is in line with our core vision of making ‘Bharat’ employable by adopting the mantra of lifelong learning,” according to moneycontrol.
Analysts on the other hand, also give an estimate of the statistics that every year over 50 million GATE and other government exam applicants apply for coaching spending an approximate sum of INR 10,000. This merger with The Gate Academy will open up a new financial market for upGrad to tap into an additional market of INR 50,000 crore.
Sources suggest that The Gate Academy will get to keep its identity and name, CEO Ritesh Raushan will remain in his position and work to continue the company business. However, it is officially a subsidiary of upGrad which is said to provide its established technological tools and learning solutions to TGA in order to enhance the student’s learning experience and improve the subsidiary’s business with respect to sales, marketing and digital presence.
Ritesh Raushan, CEO and founder, The Gate Academy mentions in a statement that the company aims to leverage technology for a better future-oriented learning experience while employing its extensive experience in both online and physical modes of teaching. Furthermore, the company aims to create fundamental changes in the education technology segment by creating a “world-class” product.