upGrad bets on ‘top-up/tank-up’ strategy

EDTECH FIRM UPGRAD will focus more on high margin businesses like upskilling courses rather than formal education formats in order to drive profitability as it prepares for an initial public offering seven to nine quarters down the line, majority shareholder Ronnie Screwvala told FE.

- URVI MALVANIA

Profitability will further be driven by the "top-up and tank-up" phenomena for the firm, he said, as more professionals in India look to acquire additional skills, and international customers, most notably in the North American market, look to upskill and gain a competitive edge.

The firm, which doubled its revenues in FY24 over FY23 is looking at a growth of 35%-40% CAGR in future, though growth in the year ending March 2025 will be lower. "We wanted to swing completely to everything being profitable. We wanted to see that anything that was too much of a burn for us to get growth, we will not do it," Screwvala said.

This includes dialing back on the university-led education vertical where the ed-tech firm gets 70% margins as compared to the non-university led modules where margins can be upwards of 90%, he added. Currently, 40% of upGrad's total revenue comes from university-dependent programmes.

Top-up and tank-up

In the non-university programmes, upGrad sees a clear play for upskilling courses, especially competitive job markets abroad, and the enterprise segment in India.