Byju’s, the education technology based startup became the 4th most valuable startup in India in April 2019. The valuation of BYJU’s now comes after the valuation of first 3 most valuable private internet companies in the country, Flipkart, Paytm and Ola.
The company positively disrupted the education industry in India, and the baby steps that led to the eponymous Byju’s classes, has grown into a $8 billion company. The Byju’s app, launched in 2015, had over 33 million downloads a year by April 2019. Out of these, over 2.2 million include paid users paying an annual fee.
Amid COVID-19 lockdown, the company introduced free ‘Live Classes’ on its platform in March 2020. As a result, the platform witnessed a 150% increase in the number of new students learning on its app.
(A) About the BYJU’s Founder
Mr. Byju Raveendran
is the founder of BYJU’s platform. He grew up in a village in Kannur district of Kerala. His parents were school teachers where his father taught Physics and mother taught Mathematics. After completing his schooling, Mr. Byju completed his Bachelor’s degree in Mechanical Engineering from Government Engineering College, Kannur.
He worked as an Engineer with a UK-based shipping company & there, helped a few of his friends crack CAT exam using shortcuts. He aced the test himself and scored 100 percentile and yet did not join any of the IIMs.
Slowly, his small group of students expanded and had to rent auditoriums and stadiums in order to deliver lectures. Then, along with few of his old students who later joined him full time, he found ‘Think & Learn P Ltd’ in 2011, to offer online lessons, before launching his main app in 2015.
Ms. Divya Gokulnath
The co-founder & wife of Mr. Byju Raveendran joined Byju’s as a teacher, after she appeared for her GRE test. Having cleared GRE with flying colors, she even got selected in the US universities, Divya realised teaching as her passion and thus changed her course of direction towards teaching. She graduated as a Biotechnology Engineer from RV College of Engineering, Bengaluru. Given her Biotech background she loves to give lessons on Biology. Apart from teaching and being a director on the Board, Divya handles brand marketing, communication & mentoring.
(B) Business Model of BYJU’s
Byju’s offer highly personalised and effective learning programs for classes 1-12 as well as for the aspirants of competitive exams like JEE, CAT, IAS, GRE, GMAT, Bank exams etc. The company not only imparts lessons but also provides study material as well as solutions to the NCERT books.
Byju’s started with an offline model of teaching and helped students prepare for CAT exams. Later the founder introduced video based lessons. But the business model transitioned from a classroom-based model to an App-based model in August 2015. This movement enabled Byju’s to significantly increase the number of students which it could tap.
The company is based on the ‘Freemium’ model of business where the student is able to register for free and after 15 days, needs to subscribe to the advanced course. The company’s products are a huge success among the masses with 85% of the students going for renewal of subscriptions after the completion of its 1 year validity.
The company ambitiously penetrated itself in the interiors of India. In FY19, Byju’s claimed of earning 60% of its revenue from students outside the top 10 cities of India. The paid users of Byju’s increased over 90% to 2.4 million in May 2019 as compared to 1.26 million in June 2018.
The company offered two type of products till May 2019. In June 2019, the company launched another app for kids.
(i) Firstly, there is Byju’s app called ‘Learning App’ which offers courses in class 4-12 category as well as for the preparation of competitive exams. The course over the application is an online course which would need an active internet connection to view the entire course.
(ii) Secondly, Byju’s ‘Tablet learning course’, which the company sells along a Lenovo tablet, the course as well as the relevant tests are stored in the SD card & are viewed offline. The tablet offers standard features like Wifi and allows downloading of apps from the App store, but the calling facility has been disabled on the system.
(iii) Thirdly, Byju’s and Walt Disney jointly rolled out a new learning app targeted towards children aged 6-8 years called as ‘Byju’s Early Learning App’. The app would feature Disney cartoon characters in the course material which is specifically designed for students of class 1st to 3rd.
(D) Financial Performance
Over 90% of revenue of the company is earned from the school going students & is fast growing its test preparation offerings for the competitive exams.
Byju’s tripled revenue to ₹1,430 crore in the year ended 31 March 2019. The company reported a loss of ₹29 crore on revenues of ₹490 crore in FY18.
Also, the company claims to have already reached a monthly run rate of ₹200 crore due to high renewal rates. Moreover, the company also claimed that it turned profitable on a full-year basis, without disclosing the exact profit number. But as per a later report, company’s loss amounts to Rs 8.82 crore for FY19 much lower than that of FY18.
BYJU’S claimed that it has over 42 million registered users and 3 million paid subscribers on its platform from both rural and urban areas. Average time spent by users on the app is 71 minutes per day an increase from figure of 64 minutes per day of last year. Annual renewal rates (ARR) stands at 85 %. Online courses cost of the company range from ₹5,000 to ₹1 lakh.
(E) Business Operations
The company has an able team of employees. In FY19, Byju’s added over 1,000 employees to grow its sales team to 3,200 people working in over 40 Indian cities. The company employs over 600 people in its R&D team and has dedicated team of writers who write and review the script for the teachers. The most challenging task for the company lies in finding quality teachers who are capable enough to pass the content to the students.
(F) Funding Rounds & Important events
Mr. Byju Raveendran along with a team of 8 members found company called as ‘Think & learn Pvt Ltd’.
Byju’s awarded as the Fastest Growing Tech company in India by Deloitte Technology Fast 50 India.
In Series A round, Byju’s raised $9 million from Aarin Capital.
Byju’s launched ‘Tablet Learning’ program for competitive exams and for classes 8th to 12th.
In Series B round of funding, Byju’s raised $25 million from Sequoia Capital.
Byju’s ‘Learning App’ was launched and was able to attract over 2 million students within 3 month of its launch.
September 2015 to March 2016:
Byju’s raised $5 million in venture debt from InnoVen Capital in two tranches.
In a secondary transaction Aarin Capital sold its 6-7% stake in the startup to ‘Lightspeed Venture Partners’ transacting close to Rs 150 crore.
Series C round, the company was joined by investors like Sequoia Capital and Belgium-based Sofina who invested Rs 500 crore (~$75 million) in the company.
In Series D, $50 million funding led by ‘Chan Zukerberg Initiative’ & ‘Sequoia Capital India’, valued Byju’s at Rs 3,200 crore (~$470 million).
Within 3 months of previous round, Byju raised $15 million in its E round from ‘International Finance Corporation’ in exchange for a minority stake.
Byju’s acquired Bengaluru-based learning guidance tool and student profile-builder ‘Vidyartha’ for an undisclosed amount.
In Series F round, the company raised $30 million from Brussels based family office ‘Verlinvest’ reaching a valuation of ~$600 million.
Byju became a case study at Harvard University, describing the company’s growth in India & challenges faced by the company into the US and other English speaking markets.
Also, during the year, Byju’s launched ‘Maths app’ for more focus on the concepts of Mathematics as well as ‘Parents Connect’ app for tracking the progress of their child’s learning course.
Byju’s acquired two education tech startups ‘TutorVista’ and ‘Edurite’ from Pearson Plc. TutorVista gets over 70% of its traffic from USA.
In the Corporate round of funding Byju’s raised $40 million from China’s ‘Tencent Holdings’.
Byju’s signed up ‘Shah Rukh Khan’ as their brand ambassador.
As per company’s filing, BYJU’s entered the Unicorn Club.
Byju’s took over math learning platform ‘Math Adventures’ for an undisclosed amount.
Byju’s partnered with Disney for creating educational content for Class I to Class III students.
In another round, Byju’s received investment of $540 from South African venture capital firm ‘Naspers Ventures’, ‘Canada’s Pension Plan Investment Board’ (CPPIB), ‘General Atlantic’ and some existing investors. The company was valued at $4 billion and the company announced to utilise the funds on introducing more technology solutions, foraying into international edtech markets as well as rolling out of vernacular content in regional languages like Gujarati, Marathi and Tamil.
Byju’s bought US-based digital learning platform ‘Osmo’ for $120 million (~Rs 840 crore).
In the Private equity round, ‘General Atlantic’ invested Rs 33.2 crore (~$4.76 million) by investing in the compulsory convertible preference shares.
In another round of Private Equity funding ‘General Atlantic’ & ‘Tencent Holdings’ (Chinese conglomerate) invested Rs 214 crore (~$31 million) valuing the company at over $4 billion. The company plans to utilise the proceeds from the funding on its international expansion.
Byju’s Early Learn app (partnered with Disney) launched.
‘Qatar Investment Authority’ led a private equity funding round of $150 million valuing Byju’s at $5.7 billion. ‘Owl Ventures’, a leading investor in education technology also participated in the funding. The funding supports Byju’s aggressive plans of international market expansion and creation of world class learning products for students across the globe.
Also, during the year, Byju’s replaced Oppo on Indian team jersey to become new sponsor of Indian Cricket team. The company would remain the official sponsor from September 2019 to March 2022.
New York-based investment firm Tiger Global Management invested $200 million in new round of funding of Byju’s. Post funding valuation of the company stands at $8 billion which is nearly the double of last funding valuation. Funding shall be for business expansion and new launches of courses in vernacular languages.
Just a month later, existing investor General Atlantic pumped in $200 million into the company. Valuation of the company stands at $8.2 billion.
India had around 3,500 edtech stratups in the year 2018. The level of competition has been increasing day by day with new edtech companies launching their apps, but Byju’s still remains a clear market leader.
India has the largest population in the age group of five to 24, with 250 million school-going students, according to the India Brand Equity Foundation, a government trust. The poor standard of school education, with a scarcity of good teachers, also makes a case for online resources.
Other Players in this space:
- Tiger Global backed ‘Vedantu’
- Blume Ventures-backed ‘flipClass’
- SAIF partners backed ‘Toppr’
- CapitalG and Sequoia Capital funded ‘Cuemath’
But no other platform is expanded as much as Byju’s.
(H) Further Plans
- The company focuses on creating an alternative to coaching centres & tuition teachers.
- The company plans to penetrate more in the tier 2 & 3 cities of India.
- Byju’s is also considering delivering lessons in regional languages such as Marathi, Gujarati, Tamil etc.
- On the international front, Byju with its K-3 app plans to expand into new regions such as the United States, UK, Australia & other nations on the back of Disney’s universal appeal.
- Byju’s is preparing for the launch of various programme in vernacular languages.
- Company’s target is to double the revenue to INR 3,000 crore for FY20.
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