Edtec Firm Upgrad In Talks To Acquire Majority Stake in US Based Udacity By CIOTechOutlook Team

Edtec Firm Upgrad In Talks To Acquire Majority Stake in US Based Udacity

CIOTechOutlook Team | Friday, 30 June 2023, 06:09 IST

Higher education and upskilling focussed edtech Upgrad is in talks to acquire US-based Udacity, sources told ET. Udacity, which has been on the block for a few months now, is talking about selling a majority stake in the company through an equity swap.Udacity may currently be valued at over $100 million. It had earlier quoted about $200 million to an earlier suitor, but the prospect had passed.

Upgrad is in talks to buy US-based Udacity. Udacity, which has been up for sale for a while, is considering selling the bulk of its stock through an equity swap.The current market value of Udacity can exceed $100 million. It had previously given a suitor a quote of roughly $200 million, but the opportunity had vanished.

“Talks are moving at a fairly good pace and the valuation being looked at is around $100-120 million, which is about 10-12 times its ebitda’’, the sources added.

Udacity had a revenue of around $100 million, but has been struggling with its (customer) retention rate of about 70%. Also, its B2C business has been struggling, with 70-75% of the revenues coming from enterprise clients. “If retention is dropping then it may not justify the price in the long run, even if it’s through an equity swap’’, he added.

A spokesperson for Udacity said it won’t comment on market speculation. Ronnie Screwvala, founder and chairperson at Upgrad said, “We deny this. We are a private company and do not need to clarify our plans in the media. We continue to have conversations with companies around the world for potential acquisitions, and at the right time, will share developments as we choose to’’.