Byju's: The World's Most Valuable Edtech Startup
Attending school and education are a right of passage for kids worldwide and of critical importance in an increasingly complex world. Despite the importance of education, the field has changed little over the past 100 years. However, the burgeoning educational technology sector - “edtech” - is promising to transform how we learn at every stage of our educational journey. One of the most important companies spearheading the transformation of education is Indian edtech startup Byju’s.
Byju’s is a personalized learning platform that creates dynamic learning experiences for students from kindergarten through graduation across a broad range of subjects. Byju’s was founded in 2011 and over the past decade has grown to immense scale:
80 million students on the platform
5.5 million paying users
$800 million revenue run rate
100 minutes spent on the app on average during the pandemic (71 minutes on average pre-pandemic)
85% renewal rate year-to-year
Byju’s has grown to this size primarily in India - its home market - over the last decade. The company has now set its sights on an ambitious global expansion program to power the next phase of its growth.
Over the course of the past decade Byju's has evolved to offer a broad range of educational services to its users. Today, Byju’s has four core product offerings for students using its platform:
Byju’s Classes: Personalized online tutoring classes
Byju’s App: Asynchronous learning
Byju’s Early Learn: A specially crafted learning program for young kids developed in partnership with Disney
Byju’s Test Preparation: Byju’s offers a range of material for preparing for a range of tests and exams such as India's JEE, NEET and IAS entrance exams
Byju’s offers interactive online classes from top teachers across India with personalized attention and mentoring that students can work on from the comfort of their own homes. Students have to purchase access to these classes for anywhere from 2,000 - 3,500 Indian Rupees per month (roughly $25-50 / month) for access to 16 classes per month. These online classes combine powerfully with into the Byju’s Learning App which includes over 50,000 videos, tests, quizzes and games for students to learn asynchronously. The combination of online classes with practice material has proven a powerful combination for students in India, leading to an 85% renewal rate year to year.
The true power of Byju’s platform is its personalization engine that helps create a hyperpersonal experience for students and guide them through the learning process and a pace that best fits their needs. Byju’s has tagged its learning content with multiple properties and parameters helping identify the different concepts covered in videos and exercises, the level of difficulty, important prerequisite knowledge and more. In addition, as students watch videos and complete exercises on the app it starts to build a detailed learning profile on the student. Byju’s then feeds the individual learning profile of each student as well as this detailed tagging data on its content into an algorithm which customizes the amount of time spent on different concepts, the ordering of exercises and adding remedial content as needed in areas where a specific student is weak. This helps create a smooth learning curve for each student irrespective of their strengths and weaknesses in a subject. Byju’s Early Learn product is targeted at parents with young children. This product helps teach children between the age of 6-8 basic concepts through animated videos featuring Disney characters and stories familiar to them. The learning journey is also personalized in this product.
Finally Byju’s test preparation content is straightforward content designed to help Indian students to practice and prepare for a range of entrance exams used by the Indian education system to filter students for admission to different Tertiary education institutions. The famous Joint Entrance Exam - conducted four times a year - is used to determine admission to India’s famed Institutes of Technology, the country's most elite educational institutions.
Despite its scale, Byju’s ambitions have far from been achieved. The company’s current growth plan involves acquiring a range of edtech startups to broaden its capabilities and reach while simultaneously pursuing an international expansion strategy.
Over the past few years Byju’s has acquired over eight different companies including Aakash Education services most recently for over $950 million. This acquisition spree is far from over and the company has been very open about some of its future targets including Bengaluru-based Great Learning; Noida-based Gradeup, and Mumbai-based Toppr. Byju’s is using its existing platform and large userbase as the foundation to pursue an aggressive global edtech rollup strategy - a strategy rarely seen in the startup world, even for companies at scale.
In addition to acquiring companies, Byju’s has its eyes set on new markets internationally. Earlier this year Byju’s launched its Future School product that will become available in the United States, UK, Brazil, Indonesia and Mexico over the course of this year. At the moment Future School will offer personalized coding and math education to students and online 1-on-1 tutoring from over 11,000 female teachers in India. These English speaking teachers will be able to teach students at relatively low cost for the company and facilitate a gross margin as high as 60%. The company is aiming to grow Future School to a $500 million line of business over the course of the next year.
Byju’s has used its financial muscle to acquire companies that are accretive to its international expansion plans. For example, its acquisition of WhiteHat Jr in 2020 gave it access to a platform that was already offering over 20,000 live educational sessions per day from over 7,000 teachers. This acquisition has become a critical component of both the Byju’s Classes and Byju’s Future School products.
To date Byju’s has raised over $2 billion dollars and can continue to raise even more money to finance its plans. Even more impressively the company is allegedly profitable - reporting a net profit of $2.8 million on revenues of $189 million in the financial year 2019. This places Byju’s in the fortunate position of controlling its own destiny. Its profitability and access to capital ensures it faces limited pressure to go public anytime soon and can continue to pursue its international expansion. The scale of Byju’s combined with the cost arbitrage of operating out of India gives it a huge advantage over competitors worldwide.
The expansion of Future School into its first five markets outside the US is just the beginning. There’s no good reason - besides language barriers - that Byju’s cannot serve students in every country in the world. In the years to come Byju’s may become the world’s first truly global educational company and transform how we learn in the process.