Since India forced a nationwide lockdown and closed schools and other public places at the end of March, the Bangalore-based startup Byju’s has become one of the most important platforms for students in the world’s second largest internet market.
It took the startup about four and a half years to amass 40 million students. Since the lockdown, the user base has grown to 65 million, co-founder and CEO Byju Raveendran said at the Disrupt 2020 conference Tuesday.
Students say that they were attracted to Byju’s platform for teaching them subjects. Byju, who is a teacher himself, has found intuitive ways of using real objects like a pizza to teach complex math problems.
Today, his startup is valued at nearly $ 1
In a comprehensive interview at Disrupt 2020, Raveendran shared the journey of Byju, which started as an offline platform teaching students in classrooms, auditoriums and stadiums. the startup’s plans for further expansion in international markets; his views on merger and acquisition opportunities; and how the coronavirus pandemic has impacted its business and the educational landscape in India, among others.
“Unfortunately, it took a pandemic for most stakeholders to try digital learning. Parents are now accepting the online segment more than before. This sector is clearly at a turning point, ”said Raveendran.
To make online learning more accessible for students, Byju’s made all offers available free of charge during the pandemic. However, the platform’s paying subscribers, who now have more than 4 million subscribers, remain on a steady growth path, he said.
The startup expects to have more than $ 1 billion in sales with India itself this year and take home profits of between $ 150 million and $ 180 million, he said.
“I would still call it a relative success. What we consider targeting, we have less than 4% penetration in this segment, ”he said. “More than a third of the students do not have a smartphone. There is still a lot to be done. “
Another phenomenon that sparked the pandemic in India is some consolidation in the edtech startup space. Byju’s himself acquired WhiteHat Jr., an 18-month-old startup teaching students coding skills, for $ 300 million.
TechCrunch has reported that the startup is working with several other startups, including the Indian company Doubtnut, which uses its app to enable students to get a picture of a math problem and provide step-by-step solutions.
Byju said: “The long-term potential of the sector is at an all-time high. […] We are looking for companies that can either add strong product components to our existing user base or potential new customers in new markets, or companies that can offer us some kind of distribution so that we have a head start for launching into a new market – especially in English Markets. “
“You will hear about a few more acquisitions from us. We are investigating some of them very seriously, ”he added. Future acquisitions will again be pure cash deals, Byju said, as he “values equity more than others”.
About IPO, fundraise and international expansion
Byju has not wanted to go public for at least two years, said the managing director. “We have a solid business foundation. We were able to find the right balance between high-growth and sustainable growth and have created a very profitable model in such a short time. But we haven’t really thought about public listing, ”he added.
And it seems that investors in Byju’s are in no hurry either. “We don’t need to be publicly traded to allow some of the early investors to exit, as the company will generate enough cash on its own. Many of them have already taken the money they have invested in the last few rounds, ”he said.
Byju’s raised more than $ 700 million this year. We asked Byju why the startup is raising capital. “We were very capital efficient in terms of using the primary capital we raised. In the first five years, we used less than $ 350 million of primary capital – which shows how efficiently we have scaled the model, ”he said.
“Most of the recent fundraising campaigns are used to finance inorganic growth such as cash acquisitions. We use it to add some strong business models. We never raised money because we needed it. It was always the right partner to add. Recently, we’ve added long-term, patient investors, ”he said. Byju’s likely isn’t finished with its fundraiser as the startup is currently working with at least two other investment firms.
To expand into international markets, Byju plans to launch a digital learning app for children in several English-speaking markets. He said WhiteHat Jr. will introduce the math theme of its offering to serve customers in various markets including Australia and New Zealand.
We also talked about what he thinks of other giant startups in India that are not profitable today, what kind of message is being sent to international investors, and whether there is room for new players in the Indian education market and much more. You can see the full interview below.