After BYJU’s raised a $300 million funding round in October 2021, the Edtech startup was valued at an astronomical $18 billion, becoming the highest valued company in the Indian tech startup ecosystem. And not just that, BYJU’s also holds the title of the most valuable Edtech startup in the world and the 15th highest valued startup in the whole wide world. With a net worth of Rs 24,300 crore, Byju Raveendran and his family have become richer than Rakesh Jhunjhunwala (India’s Warren Buffet), Bharti Mittal (Founder of Airtel) & Anand Mahindra (Founder of Mahindra Group). If you’re thinking these achievements deserve applause, let me add that that BYJU’s was founded by a non-technical founder who hailed from a small Indian village and has achieved all this success in only a decade after it was founded in 2011.
BYJU’s Founding & Growth Story
In recent months, there have been reports that BYJU’s is planning for an IPO, eyeing a valuation of $40 billion to $50 billion in its stock market debut. Add to it the fact that BYJU’s has spent roughly around $3 billion on acquiring 15 companies since its founding (9 of which were acquired in 2021 alone) and targeting aggressive expansion in international markets, BYJU’s might go down as one of India’s major tech exports to the world in history books.
In this case study, we will learn about the story of BYJU’s from its beginning, trace its phenomenal growth over the years, and study the business model it employs.
In 2011, Byju Raveendran officially registered the company ‘Think & Learn Pvt Ltd.’, better recognized by its brand name, BYJU’S – The Learning App (launched in 2015). But it would be a misnomer to think BYJU’s started in 2011; the seeds for what people know as BYJU”s today were sown in the early years 2000s.
Born in Azhikode, a small village in Kannur, Kerala; Byju Raveendran belonged to a middle-class family. After his completing his education as a mechanical engineer, he got a job in a multinational shipping firm, travelling the world as a service engineer. If we were to go by normal standards, one could say that he was living the ‘Indian dream’ of having a high-paying job in a reputed firm.
At the time, he had no aspirations of becoming an entrepreneur since he found his job of visiting new places exciting and challenging. After two years of working, when he came to Bangalore on a holiday, a few of his friends preparing for CAT requested him for help with Math since he was good at it. It was then that Byju’s tryst with teaching began.
After helping his friends prepare CAT, he also gave the exam for fun though he had no plans to opt for an MBA. To his surprise, he scored 100 percentile and even his friends fared well in the exam.
When Byju came back for holiday in Bangalore again, more friends of his friends came for him to help to prepare for the CAT exams. In those six weeks, Byju’s ended up training more than 1,000 students. Because of the enormous response his teaching got, he decided not to return to his job.
In an interview with YourStory, Byju’s stated, “It kept getting bigger and better. I started traveling and doing the sessions in nine different cities every week,” he says, “It used to be Saturday mornings in Bengaluru, evenings in Chennai, Sunday mornings in Mumbai, and evenings in Pune… and Monday to Friday, five more cities.”
What made Byju’s so successful was that he focussed more on teaching students how to learn rather than just making them solve hundreds of questions. Soon, Byju’s had to shift to auditoriums and eventually to large indoor stadiums, where he would tutor close to 25,000 students together.
Byju’s was making more money than he had ever imagined, but he was still a one-man army. In 2009, he created videos of his lectures and used V-SAT to beam them to students in 45 cities he couldn’t travel to. Although Byju’s never had a business plan in mind, his venture followed its own course.
In 2011, the idea to scale by building a team came from Byju’s former students, who reached out to him after finishing their courses at various IIMs. After registering the company, Byju’s decided that they would prioritize creating content for school students. The decision to move from CAT to school students came from his observation that most of the students lacked a proper foundation & conceptual clarity.
Byju’s and his team started working on creating content in 2011, but it wasn’t until 2015 that BYJU’s Learning App was launched. With a healthy mix of animation, gamification, and live-action formats; Byju’s created highly engaging video lessons having distinguished content.
A year after its launch, BYJU’s had been downloaded 5.5 million times, with more than 2.5 lakh paying subscribers. The launch of BYJU’s coincided perfectly with the period which is now known as the Indian Digital revolution in 2016, fueled by the launch of highly affordable high-speed internet plans by Indian conglomerate Reliance.
By 2018, Byju’s had grown to 1.5 crores (15 million) users and 900,000 paid users. In 2019, Byju’s displaced Oppo to win the sponsorship rights for the Indian cricket team jersey. By Aug 2021, the number of registered users on BYJU’s app had increased to 100 million.
BYJU’S Business Model
BYJU’s makes money using a freemium business model, under which it offers a free trial with limited features, and students have to buy a paid subscription to access the full content. Additionally, BYJU ‘s also earns money by selling tablets & SD cards, and reference books.
In FY20, BYJU’s reported revenue from operations of Rs 2381 crore, up 82.31% from Rs 1306 crore in FY19. 75.4% of FY20 revenue came from India & the remaining 24.6% came from the rest of the world. BYJU’s saw losses widening from Rs 8.82 crore in FY19 to Rs 262.1 crore as total expenditure doubled from Rs 1376 crore in FY19 to Rs 3021 in FY20.
Out of the Rs 2381 crore BYJU’s earned in FY 2020, Rs 1675.7 crore came from the sale of tablets and sd cards, Rs 560.6 crore came from the sale of reference books & Rs 144 crore from tuition and service fee.
Advertising, BYJU’s single largest form of expense; accounted for Rs 1175.6 in FY20, up 157% from Rs 457.6 crore spent in FY19. BYJU’s also nearly doubled spending on production and procurement of educational content from Rs 252.6 crore in FY19 to Rs 458 crore in FY20
As of August 2021, 6.5 million of the 100 million students registered on BYJU’s were paying for courses. On average, students spend 71 minutes per day using BYJU’s.
BYJU’s Acquisitions & Expansion
While BYJU’s has expanded internationally and added regional language content to its basket of offerings, the company has also pursued an inorganic growth strategy driven by acquisitions. The strategy seems simple: build an ed-tech empire by acquiring proven startups instead of building from scratch to compete with them.
Some of BYJU’s prominent acquisitions include OSMO (US-based education startup targeting kids aged 4-10), WhiteHat Jr ( Online coding school for kids), Aakash Educational Services
(Pan India Offline coaching classes), Great Learning ( Career Upskilling platform ), Epic ( eBooks for kids ), Toppr ( E-learning & Test preparation ), Scholr ( Doubt solving platform for school students ) & TutorVista ( India based startup providing online tutoring in the US.
If BYJU’s succeeds in becoming a popular education platform in international markets like the US & UK like it has in India, it would mean an increase in revenue by an order of magnitude and a win for the Indian startup ecosystem.
In an interview with Business Insider, BYJU’s Raveendran had laid down his ambition saying, “India can provide teachers to the world, just like software engineers,”
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