We don’t see ourselves as startups: Upgrade Screwvala

Screwvala believes that an upgrade is much more than a startup and calls it a loss to the business.

“We don’t see ourselves as a startup because I think it is very dangerous in academia if you are a startup that is impacting lives and careers. So, therefore ‘funding’, ‘unicorn’, ‘startup’ are not words that give us any satisfaction or happiness,” Screwvala said in an interview. Year old or 100 year old establishment unless you (tag) that don’t remove it?”

Screwvala’s approach appears to be unconventional as even mature companies aspire to imbibe this aspect of how startups work to make their organizations agile, energetic and innovative. In addition, many large companies are shifting from a command-and-control leadership style to decision-making at lower levels of the organization, such as how startups operate.

While Screwvala may still retain the company’s style of work that helped the seven-year-old grow rapidly, he believes the startup tag is an obstacle, at least for an education company. Widespread layoffs by education startups amid the current funding winter, with questionable sales practices and startups shutting down, leaving students stranded, has earned the sector some notoriety.

According to Screwvala, Upgrade has achieved a significant milestone following acquisitions and partnerships with over half a dozen brands and companies in areas such as upskilling, job preparation, recruitment and overseas education.

Some of the companies it acquired include Harappa Education, Examspur, Talentage, Study Partners, Work Better, KnowledgeHut, Impartus Innovations and Recruit India.

“We will continue to make acquisitions to plug holes in our life-long learning and re-skill value chain – and our focus will be on global markets,” Screwvala said.

“We are working on deepening our presence in each of these segments that we have right now. Our annual revenue run rate (ARR) is expected to reach $400 million by March 31st – by then we will have $100 million of gross revenue in our January-March quarter.”

He added that a large part of the company’s future non-linear growth will come from its overseas education business, where it plans to bring overseas campuses to India. He said that India is a huge market and the skilling segment will grow organically.

He said the company generated $250 million in revenue in fiscal 2012 and is planning an initial public offering in the next 18-24 months.

Upgrade has so far raised about $280 million in primary capital from investors and an additional $100 million through stock swaps. Last time it was worth $2.25 billion. Last year, it raised $160 million from Temasek Holdings Ltd., International Finance Corp (IFC) and IIFL Group.

At a time when the larger edtech sector is under pressure as the Covid pandemic eases, and with funding taps running dry, Screwvala said it doesn’t take a lot of capital to build a sustainable business in the education sector.

“The demand for upskilling and higher education will not go away. Investors with deep pockets still see value in this area. It’s just a matter of which segment you’re playing in. The K12 isn’t where there’s any headroom. Too much zero-cost capital has already gotten into that segment, with investors and founders building an integrated real business versus fundraising on steroids,” he said.