Edtech unicorn upGrad in Talks to Acquire Udacity, a Declining Edtech Firm

Edtech major upGrad is reportedly in talks to acquire US-based edtech firm Udacity. Udacity has been on sale for several months and is considering a majority stake sale through an equity swap.

The potential acquisition comes as Udacity's value has declined due to a contraction in operations, raising concerns about its long-term sustainability. However, upGrad denied the media claims while there is no official comment from California-based Udacity.

Founded in 2012 by Sebastian Thrun and David Stavens, Udacity is a global online training platform that offers industry-relevant skills in areas such as AI, machine learning, data science, and more. 

Despite joining the unicorn club in 2015 with a funding round of $105 million, Udacity's declining customer retention rate and revenue of approximately $100 million have made the company open to selling. This could lead to a significant decline in its value compared to its peak as a unicorn.

On the other hand, upGrad has been expanding its presence and recently announced its intention to establish a medical institute in the Pacific region.

The company has shown commitment to organic and inorganic growth through a recent internal rights issue that raised Rs 300 crore. With 31 offices worldwide and 16 previous acquisitions, upGrad is well-positioned to pursue the potential acquisition of Udacity, which could contribute to its revenue growth.

The acquisition talks between upGrad and Udacity highlight the growing trend of strategic investments and mergers in the edtech sector. Despite having available capital, edtech companies are seeking opportunities for growth and expansion through acquisitions. The current market conditions in the US make it an opportune time for upGrad to pursue buyouts, as assets are available at more favorable prices compared to India.

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