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For example, it's been reported that upGrad raised 120 million from Temasek. What does this really mean? Why would a education company want to raise money from another investment company? What is the involvement of the investment company here?

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    are you asking as an investor, a customer, an employee, ... ? Do you just wonder in general why it matters that companies have raised money? Apr 27 at 13:11
  • The term "raised money" means a company either borrowed money or brought in more money as an investment. That's all it means.
    – Fattie
    Apr 27 at 14:48
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    It is reported as news because the company issued a press release to show how successful and wonderful their company is. A press release is basically an ad disguised as news.
    – JohnFx
    Apr 27 at 22:53
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    Why is anything reported as news? Because some journalist thought it would have some interest to some significant portion of their readership.
    – Michael
    Apr 28 at 10:58
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    How could it not be "news" that Company X now has 120 million it didn't have yesterday? Why d'you think an education company is different from any other? Your "another investment company" is ambiguous, at best. Are you Asking about an extra company, other than the one Company X used before, about an investment from any company, or what, exactly? Why would the involvement of the investment company be other than to invest money? Apr 28 at 23:03
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Companies raise money so they can spend it, by and large. So the first thing this tells you is that the company (upGrad in your example) will have some money to spend. It might be able to hire more instructors, or more sales staff. It might be able to acquire a big new building, or spend more on advertising, or other "you have to spend money to make money" activities. So if you have, or are considering having, a relationship with this company, you know they have more money to spend and that they at least believe this will lead to more revenue.

Secondly, not everyone who wants a few extra million to spend gets it handed to them. The fact that the investment firm has chosen to provide the money also gives you information. It tells you they looked over the plans, the management team, the current structure, and so on and concluded that "if we provide this capital, we'll get a good return". That's a sort of vote of confidence.

I say "sort of" because sometimes the folks providing the capital are thinking "this could be a gold mine if only they started doing X, which they are not doing right now." For example, offering different services, paying less for instructors, moving from classroom to online, or whatever. So sometimes a raise like this heralds a significant change in the way the company operates. Depending on what relationship you have or intend to have with them, you might not like that change.

And finally, the news release itself often gives you information about the company and its plans: how many customers it has now, whether it's the biggest whatever in which country, is to going to expand to other countries, that sort of thing. A well written article will also include information like who their competition is or what the relevant issues in that industry are at the moment (for example, the pandemic pretty much stopping all in-person training while raising the demand for online training.) This will let you learn more about the company within the context of its industry, just from one article. It may also give you names (of people in the company, of competitor companies, etc) you can use to search for more information.

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  • 3rd paragraph is a great caveat; hard to convey so much information to someone with limited info who has a question that perhaps comes before basic learning, but this is good. Apr 27 at 14:04
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    Regarding your third paragraph: what power would the investor have to influence the direction of the company with the lended capital? Is it just a suggestion, or can they actually stipulate that the company make certain changes?
    – gardenhead
    Apr 27 at 20:52
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    That would depend on the terms under which the capital was raised. Sometimes it's a loan, but even then it might be for a particular thing like building something or acquiring something. Other times the investor now owns a part of the company, perhaps has some seats on the board, various ways to influence the direction of the company. Apr 27 at 21:02
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    @gardenhead: At an absolute minimum, the investor has the power to say "no" next time, which may or may not be significant to the company depending on a variety of factors. (How big is this investor? How smart is the investor? Did the investor write a column in Bloomberg about how stupid the company was for ignoring their advice? Etc.)
    – Kevin
    Apr 28 at 1:12
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    Also...depending on the type of organization and the country, there may be laws requiring publication of such information.
    – rtaft
    Apr 28 at 17:59

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