Upgrad, the edtech unicorn, is set to experience a leadership change as co-founder and managing director Mayank Kumar steps down from his executive role to focus on his new venture. Ronnie Screwvala, Upgrad’s founder and chairman, is expected to take on a more active role within the company, sources revealed. Kumar has reduced his involvement at the Mumbai-based firm starting this month as he seeks investors for his new startup, which aims to place skilled Indian labor overseas, particularly in the healthcare sector.
Kumar’s departure aligns with Upgrad’s ongoing developments, including its latest funding efforts. The company is reportedly in the final stages of securing $50-60 million from existing investors, maintaining a valuation of $2.25 billion, according to insiders. Despite Kumar’s exit, there will be no changes in the company’s shareholding structure, with Screwvala holding 44% and Kumar retaining 8%.
Screwvala’s increased involvement comes at a critical time as Upgrad eyes an IPO in India. Industry experts suggest that Screwvala’s hands-on role could enhance the company’s appeal to public market investors.
“He (Mayank) has already begun pitching his new venture to potential investors and is now in the process of registering the company. Since October, he has not had any operational involvement at Upgrad,” a source close to the matter stated. Kumar’s shift occurs as the edtech sector undergoes significant change, driven in part by the turbulence surrounding Byju’s and a broader reset in the higher education space.
Despite these challenges, Upgrad has continued to grow. In FY24, the company reported a revenue of Rs 1,715 crore, a 25.54% increase from the previous year. However, insiders suggest the growth did not meet the company’s original ambitions. With plans for an IPO and the current bull run for new listings, Screwvala is expected to take on a more prominent role in strategic operations moving forward.
Both Screwvala and Kumar have confirmed the restructuring. “Ronnie and I discussed my reduced involvement in day-to-day operations last October, and since the start of the year, we have been transitioning roles at Upgrad,” Kumar said. He added that he remains an 8% shareholder in the company and is not entirely stepping away, as his new venture in global talent mobility does not conflict with Upgrad’s mission.
Kumar’s departure comes amid significant activity in the edtech space, with companies like PhysicsWallah securing $210 million in funding and Eruditus closing in on $150 million. Meanwhile, Upgrad itself recently raised $35 million in debt financing from Evolution X.
Upgrad’s financial health remains strong, with revenues from the consumer segment continuing to grow. According to a report by 360 One, an investor in Upgrad, the company recorded Rs 479 crore in revenue in Q4 FY24, a 27.2% year-on-year increase. The skilling and reskilling business, along with placement services, became profitable during the same period. The company also noted improvements in customer acquisition costs, particularly in non-university programs, which saw a significant jump in Q4 FY24.
As the company expands its offerings with more than 70 courses in collaboration with over 20 tier 1 and tier 2 universities, Upgrad continues to establish itself as a leader in edtech, despite the shifting landscape.