upGrad Cofounder Mayank Kumar Steps Down To Float New Venture

Edtech unicorn upGrad’s cofounder and managing director Mayank Kumar has reportedly stepped down from his executive role to launch a new venture.

As per ET, citing sources close to the matter, from October, Kumar has reduced his participation in the company, as he is pitching investors to back his new startup focussed on placing skilled Indian labour abroad, especially in healthcare.

Additionally, the sources confirmed that upGrad is nearing a funding of $50-60 Mn from its existing investors at a valuation of $2.25 Bn.

Inc42 has reached out to Kumar and upGrad for comments on the development. The story will be updated based on the responses.

Furthermore, the report said that cofounder and chairman Ronnie Screwvala will be taking an active role in running upGrad, following the exit of Kumar.

However, the sources also said that there will be no changes in terms of ownership in the company following the exit. 

The report also revealed that Screwvala’s takeover of managing the firm is synced with the edtech’s plans for an IPO in India, and his deeper engagement at the firm would impress the public market investors, based on sources.

Founded in 2015 by Kumar, Screwvala, Phalgun Kompalli and Ravijot Chugh, upGrad offers higher education courses and skilling programmes in collaboration with universities.

The company counts Temasek, Murdoch’s Lupa Systems, International Finance Corporation and IIFL among its marquee investors.

Earlier this year, the Mumbai-based edtech unicorn was in advanced discussion to take over US education firm Udacity and is seeking a fundraise of up to $100 Mn to finance the deal. Back then, it also reached out to a host of external investors to secure around $50-60 Mn, while the remaining investment is believed to come from existing investors.

Meanwhile, upGrad was looking to raise INR 287.5 Cr (about $34.4 Mn) debt from financing platform EvolutionX Debt Capital, in late June, to fuel its growth capital, fund operating expenses of the company, and for general corporate purposes.

The development of upGrad raising funds comes weeks after its peer edtech unicorn Physics Wallah raised $210 Mn (about INR 1,756.7 Cr) in its Series B funding round, led by Hornbill Capital, at a post-money valuation of $2.8 Bn.

The edtech startup’s net loss surged 76% to INR 1,141.5 Cr in the financial year 2022-23 (FY23) from INR 648.2 Cr in the previous fiscal year. 

upGrad reported an operating revenue of INR 1,169.6 Cr in FY23, an increase of 97% from INR 595 Cr, a year ago.