Upgrad, a higher education and upskilling-focused edtech company, is reportedly in talks to acquire US-based Udacity, aiming to buy a majority stake in the company through an equity swap.

What Happened? The valuation being considered is around $100 million-$120 million (₹820.5 crore-₹984.6 crore), which would be about 10-12 times its EBITDA, as Udacity has faced challenges in customer retention and its B2C business, sources told Economic Times.

Udacity, founded in 2011 by Sebastian Thrun, had a peak valuation of $1 billion (₹8,205.2 crore) in 2015 but has since seen a significant decline in operations, leading to the willingness to sell at a lower value.

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The California-based learning platform offers courses in various disciplines, including data engineering, artificial intelligence, and business analytics. Udacity has raised a total of around $238 million (₹1,952.5 crore) to date from investors such as Andreessen Horowitz.

Meanwhile, upGrad is actively seeking acquisitions to strengthen its position in the upskilling space as the COVID-19 pandemic has boosted demand for higher education and upskilling-focused edtech, creating an opportune time for buyouts at better prices in the US market.

Upgrad has already acquired 10 companies, including those in the recruitment sector, and has raised substantial funding from investors like Temasek and James Murdoch’s Bodhi Tree.

This potential acquisition comes amidst challenges faced by Byju’s, India’s largest edtech company, has been dealing with issues related to corporate governance and financials. While Byju’s considered major acquisitions in the US, the focus has shifted to resolving domestic concerns.

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