MAYANK KUMAR

Edtech in India | EDUCATION & RESEARCH | VIP INTERVIEW

TBY talks to Mayank Kumar, Co-founder & MD of upGrad, about international expansion, financing, and the National Education Policy.

What have been the most significant effects of COVID-19 on the professional and lifelong learning education sector?

When it comes to higher education and the adult education ecosystem, we have seen a new phenomenon, as people have had time on their hands as compared to being forced to move from offline to online. We internally think of this as a tailwind rather than an inflection point, as more people are now looking at learning online and are picking up education to help them improve their existing knowledge and skillsets. While people are looking at doing something online, they are also worried about their jobs and thus do not want to shell out a significant sum of money. We have seen a significant upside but believe this will last longer than the COVID-19 period itself for three key reasons. One is that this shift has brought the efficacy of the online medium to the forefront, and people are taking it as a necessity rather than a choice. This medium exists and has its own acceptance. Second, the current operators across the edtech space are focusing heavily on outcomes to give concrete returns on investment, and if those things happen in the right manner, people will have greater trust in the system. Both acceptability and credibility have emerged from this particular ecosystem. The third one is generally short term and will not outlive the pandemic. Here what is happening is that, consumers have become more frugal, so among a person's expenditures such as travel and clothing expenses, education is the most guilt-free expenditure item and so they are indulging it in now.

Where do you see the most potential for upGrad outside of India, as you continue your international expansion plans?

We are looking actively at Southeast Asia and the Asia Pacific area as well as the Middle East, the UK, and the EU as another area. We have brought in two new CEOs for each region and will take our platform and learning pedagogy to those markets. Currently, 7-9% of our revenue comes from international learners, but these are essentially online programs that originated in India and are marketed abroad. With the two new geographies, we will be catering to the local needs of the given markets. We are currently looking at doing this on our own but are open to inorganic acquisition if there is a good asset that can give us a foot in the door as we expand our presence.

Thus far, upGrad has not needed to raise external capital. Will this strategy change with regard to your ambitious international expansion plans?

So far, we have been all founder funded. We have a healthy business that we can scale and build with an investment coming from the business itself, though there has been great interest from various groups of investors with whom we are having active conversations. In the next year or so, we will close a round of financing to enable us to expand our presence in India and globally. We have been receiving interest from both, from within and outside India. There are global funds that are actively interested, so perhaps it is a good time to bring in a partner that will be able to help be part of our journey in the long term.

What role do you foresee upGrad, or the edtech sector in general, playing in the implementation of India's ambitious new National Education Policy?

The first thing is that the government has pushed for more online degrees, and that push in itself will open a larger market for edtech providers and enabling them online will be crucial. The government is pushing for a stronger adoption of technology within the context of learning on campus, and it is encouraging universities to start using technology, which opens up many opportunities for edtech providers to support offline institutions. Secondly, government announcing the credit increase has also added up to the overall benefits. Now learners can acquire 20%-40% of online credits, thereby doubling up the edtech market. The third critical thing is that the government has also allowed academic credit banks, which enables any learners to do their bachelor's degree for a year, take a break, and then resume after two years to complete the remaining credits or go to a different university and get access to those accumulated credits. That will unlock larger opportunities for edtech like upGrad to reach out to a wider audience with relevant online programs. We have a few online programs that are approved by the All India Council for Technical Education (AICTE) and a few which are accredited by the National Skill Development Council (NSDC). In India, there are currently 40 million people enrolled in higher education, and we need to add 20 million additional capacity in the next five to six years. Never in the history of human civilisation has a nation been required to train 20 million additional individuals in a short period of time. Therefore, online will need to play a role similar to what mobile phones did at the time when India was growing, and we did not have enough landline penetration. Similarly, online learning sector, with its right university partnerships and technology amalgamation, will play an integral role across geographies, thereby creating a future-ready workforce.

What is your outlook for the edtech sector and upGrad for the rest of this year and 2021?

From a market perspective, it is a good time for the edtech ecosystem. COVID-19 has been an enabler for edtech and has also given a net positive push to other sectors. I do not think there will be a post-COVID-19 era, and we are resuming offline classes for about next six months to a year. Given the scale and complexity of this country, it will take even longer, and therefore edtech is here to stay. In the long run, I definitely believe that it will lead to a permanent shift in the minds of consumers, and the penetration of edtech will continue to grow. For upGrad, our tasks are clearly laid out, and we plan to partner with more and more offline universities to enable them to go online. Moreover, internationalization and taking some of our products to the global markets are an integral part of this year's strategic priorities. This is a good time to look at potential M&As in the education space where we can collaborate and partner with other edtech and education providers to build something larger together than what we could do individually.