UpGrad, a technology company founded by media entrepreneur Ronnie Screwvala, has raised $120 million (Rs 900 crore) from Singapore's sovereign fund Temasek in its first external funding round.

After the funding, the six-year-old Mumbai-based company is estimated to be priced at $575-675 million.

UpGrad is a company that specialises in post-secondary education, providing online courses from universities all over the world. Data sciences, digital marketing and networking, product management, and software development programmes are all available through the company. Customers in India are served by Upgrad Education.

Screwvala declined to comment on the details during an interaction with ET. “We are not a unicorn yet. But we are not too far behind,” he said.

Screwvala, who created UTV Motion Pictures in the 1990s, which was later purchased by Disney, has invested around $25 million of his own money in upGrad since its inception.

Mayank Kumar and Phalgun Kompalli are both members of upGrad's founding team, in addition to Screwvala.

Following the Covid-19 outbreak, the online education sector, both K-12 and higher education has seen a significant influx of risk resources.

“The proceeds will be used for mergers and acquisitions to complement our ecosystem in higher education and working professional bases,” says Screwvala, who is also the company’s executive chairman.

Apart from acquisitions, the new funds will be used to extend upGrad's presence in the United States, the United Kingdom, the Middle East, and Asia-Pacific. The edtech company has developed a presence in the Asia-Pacific region in the last six months.

“We think the post-K-12 segment is going to be much larger than the K-12 segment in coming years,” Screwvala said. “Online degrees, especially undergraduate degrees, are a highly scalable opportunity.”

Investments will be made towards that end as well.

There are multiple categories within post K-12 — college and degrees, test preparation, and lifelong learning. “In lifelong learning, there are longer, deeper courses, shorter courses, and top-up courses. An M&A in those areas is what we’re looking at,” Screwvala said.

UpGrad entered the test preparation market late last year when it paid an undisclosed sum for The Gate Academy, a chain of coaching institutes based in Bengaluru. Around the same time, it acquired Rekrut India, a recruitment and staffing solutions company.

Screwvala maintained that 85% of those who signed up for upGrad’s courses completed those. “Our completion record is better than that of many similar companies in the US,” he said.

upGrad wants to list the company in the public market in due course. “It’s a long-term business that we're growing. As much as funding is a stepping stone towards building that, an IPO takes it to another level. When you're a listed company, it changes your profile around the world,” Screwvala said.

It declared in April that monthly sales had surpassed Rs 100 crore, resulting in an annual revenue run rate of Rs 1,200 crore. “We see ourselves growing at 100% a year for many years,” he said.

The Indian edtech industry will see heavy financial and strategic investor interest in 2020. The volume of consolidation and M&A operations was at an all-time high this year. "Backed by strong funding, large incumbent platforms chose the M&A route to accelerate their growth and expand into ancillary offerings," the report says.

As the two most well-funded companies, Byju's and Unacademy have led the trend of market consolidation.

According to data from Tracxn Technologies, which collects data on private companies, Byju's, the most profitable company in the industry, has earned $2.77 billion so far. In a transaction worth approximately $1 billion, it recently acquired Aakash Educational Tutorial Services. According to Tracxn, SoftBank-backed Unacademy has raised $440 million to date.