What makes BYJU'S India's highest-valued startup at $16.5 Bn?

Decacorn BYJU'S has now become the highest valued startup at $16.5 Billion. Only in March, the startup had raised close to $460 million in its ongoing Series F round led by MC Global Edtech Investment Holdings LP. The company was then valued at $13 Billion. Even then, CiOL had reported that another round of funding would make BYJU'S more in value than Paytm. Soon enough, the new round of about $340 Million, values the company at $16.5 Billion, half a billion more than Paytm.

UBS Group along with Zoom founder Eric Yuan and Blackstone led the round. Abu Dhabi sovereign fund ADQ and Phoenix Rising–Beacon Holdings also participated in the round. Reports suggest that the investment is a part of the $1.5 billion funding goal that BYJU's aims at. Some of its recent investors also include B Capital Group and Hedge Fund XN. The startup was valued at $11 billion late last year, and $5.75 billion in July 2019. Further, in interaction with MoneyControl, BYJU'S founder Byju Raveendran revealed his plans to take the startup public by 2022-23.

A round-up of all investments in BYJU'S

The EdTech giant before the $460 Million Series F round, had last raised $500 million from Silver Lake, Tiger Global, General Atlantic, and Owl Ventures. In 2020, BYJU'S has raised around $1 billion in funding. This included its Series F rounds which saw Tiger Global and General Atlantic earlier investing $200 million each. The edtech unicorn also raised $122 million funding from DST Global, the investment fund headed by tech billionaire Yuri Milner. Before this in June 2020, the startup had secured $100 million from US technology investor Bond. Further, reports suggest that including the current round, BYJU’S has raised more than $2.3 Bn in equity financing.

A look at all acquisitions by BYJU's

The EdTech giant, in one of the biggest deals in India, acquired brick-and-mortar coaching giant Aakash Institute for $1 Billion. The addition of Aakash is a significant step towards strengthening BYJU’S product offering. It reiterates the company’s focus on creating impactful learning products for students by adding more verticals, subjects, and languages to the same platform. Divya Gokulnath, at a TiE Conference, said that she believes that the new normal will not be 100% online. The future is “blended learning”, she believes and hence, this acquisition may be a step into venturing into blended learning. Reiterating the idea, Byju Raveendran also said, “The future of learning is hybrid. This union will bring together the best of offline and online learning, as we combine our expertise to create impactful experiences for students.”

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The acquisition marks BYJU'S strong niche in competitive exams' coaching for JEE and NEET. BYJU’S portfolio also includes preparatory guides for students pursuing UG-PG courses, UPSC and other Civil Service exams, and major entrance exams. In recent years, it has also expanded its catalog to serve all school-going students, in India, and internationally.

Other acquisitions...

In 2019, it acquired Osmo for $120 million. Before that, in 2017-18, it acquired TutorVista (including Edurite) from Pearson and Vidhyartha and Math Adventures. Last year, it bought kids-focused coding platform WhiteHat Jr. for $300 million and fully acquired the 3D Visualisation platform, LabInApps. In another report, BYJU’S also aims to acquire edtech rival Toppr in a $150 Mn deal. BYJU’S has also acquired Edtech Scholr in an all-cash deal of Rs. 15 crores.

Interestingly, Osmo, a gamified learning app, provided edtech with a strong foothold in international markets. Similarly, Tutor Vista’s online tutorial platform connected the company and its students with about 2,000 teachers across India, United States, UK, Australia, China, and South-East Asia. Edurite's products, aimed at content for CBSE, ICSE, and various State Boards in India provided the strategic push towards a systematic curriculum-based syllabus. Further, with the acquisition of Scholr, who specializes in homework help across NCERT textbooks, state board textbooks, and other board books, BYJU'S strengthens its hold in the "problem-solving" of school kids' syllabus.

Aiding holistic learning...

With WhiteHat Jr, the company looks at a more holistic approach towards education with coding. This would also have benefitted BYJU’S in its US expansion plans. This comes true in the form of BYJU’S Future School; the Future School aims to cross the bridge from passive to active learning. For that, it aims to offer an interactive learning platform that blends real-time instruction with lessons. They aim to generate creative outcomes for kids aged between 6-18 years. The course, blended with coding, will further help students learn concepts while creating applications.

Other subjects like Math, Science, English, Music, and Fine arts will help students engage in learning through storytelling. The company has also stated that they will launch the Future School in the USA, UK, Australia, Brazil, Indonesia, and Mexico in May. They will further progressively expand to more geographies.

What makes BYJU'S India's highest-valued startup at $16.5 Bn?

India’s edtech industry is poised to become $30 billion in size in the next 10 years. The current market size is about $700-800 million. In the last 5 years since BYJU's inception, the industry has attracted equity investments of $4 billion. Leading the bandwagon is edtech leader BYJU’S who has raised more than $2.3 Bn in equity financing.

The pandemic has brought plenty of momentum for edtech adoption in India, The market size of edtech in India is estimated to grow 3.7x in the next five years, from $2.8 Bn (2020) to $10.4 Bn (2025). Among the edtech sub-sectors, K-12 education startups with $4.3 Bn in total market size will have the single highest market share; 41% of the total edtech market in India. Further, the pandemic has increased the demand for online test preparation solutions. They have also proved to be an effective replacement for traditional offline coachings.

BYJU's consumer base

A look at BYJU'S acquisitions presents a clearer picture as to how its product catalog aided the transition to digital for Indian parents and students. Since the lockdown in March 2020, BYJU'S has seen over 25 million new students start learning from its platform for free. Today, the app has over 75 million registered students and 4.5 million annual paid subscriptions. BYJU'S had doubled its revenue from ₹1,430 crore to ₹28,00 crore in FY 19-20. Compare this to the userbase of 40 million by BYJU's in the first 4.5 years since its inception.

Thus, a bunch of top-level investors, a pandemic aided compounding growth and the increasing market of K-12 education has aided BYJU's to become the highest highest-valued startup in India.