BYJU’S: Creating Classrooms for Tomorrow
Byju’s, a $10B Indian EdTech startup has emerged as a clear winner during the COVID-19 pandemic. While most of the online education platforms saw large growth in FY20, Byju’s has captured major chunk of the market share through its innovative tech products and aggressive acquisition strategy.
One of the companies that has emerged as a clear winner during COVID-19 pandemic, is the Indian EdTech startup, Byju’s. Through its digital platform it offers online tutoring in India and is now expanding its presence in other countries. Byju’s was launched in August 2015, and in just over five years reached the revenue of almost half billion USD (unverified claims by founders).
In its early years it offered educational content for students in middle and high school. Over years, it has added offerings for college going students and for those preparing for international examinations such as GRE and GMAT.
In FY20, Byju’s reported close to 70 million users of its freemium model, 4.5 million paid users. and an annual retention rate of about 85%. With the current valuation of $10 billion, it is the world’s most valued edtech startup and boasts of large global investors such as Sequoia Capital India, Chan Zuckerberg Initiative, General Atlantic, Tiger Global, Tencent and Naspers.
Why is Byju’s succeeding?
India has the largest K-12 education system in the world, with over 260 million enrolments. With the students losing access to schools during the lockdowns initiated in March 2020 (when COVID first hit India), the growth of e-learning platforms has been exceptional.
Among all the beneficiaries of this trend, Byju’s has emerged as a leader by a large distance. Its close competitors that were launched years before Byju’s, have failed to keep up with its growth (Unacademy launched in 2010 is valued at $2B while Vedantu launched in 2011 stands at the current valuation of $600M).
Byju’s has been able to outperform its competitors through a joint focus on innovative tech products and an aggressive acquisition strategy.
Its founder, Byju Raveendran, said in past that the goal of company is “to find the right balance between being technology driven, media-enabled content first strategy and believes in the power of self-learning[1]”. Unlike most other learning apps that provide either synchronous learning over their platforms like zoom, or asynchronous learning by uploading videos on their website, Byju’s uses an amalgamation of both these techniques. Especially, it is known for the innovative content delivery using a mix of visual techniques such as animation, games, and live inputs, making the classes highly engaging, hence higher retention compared to other platforms.
Byju’s has also been able to leverage data that it captures from its wide base of users to create a personalized content for each user, including lesson recommendations and adaptive assessments. Byju’s personalization engine tries to replicate the actions of a personal tutor, providing inputs wherever the student is lacking, thus giving more control to the students on their learning journey. Raveendran’s dream is to create “the ‘Classrooms of Tomorrow’ that would have technology at the core, empowering students to cross over from passive to active learning[2].”
Apart from its focus on technology, Byju’s has also been able to leverage its early acquisition strategy that supported its explosive growth during FY20. Between 2017 and 2019, it acquired over five young startups with niche offerings. More recently, it acquired the coding platform, WhiteHatJr for $300 Mn in an attempt to capture the startup’s existing user base in the US. It also acquired US-based startup Osmo, educational games creator, to support company’s technical products pipeline.
While the company is on an exponential growth trajectory, couple of big challenges remain to be overcome. First, slow technology adoption in older population, more specifically parents of students. Second, increasing conversion to paid users which is currently low for the company (although better than many competitors). However, with company’s focus on ROI, the team seems to be working hard to find ways to translate its user growth to its bottom line (which turned positive last year).
What to expect in future?
Although, COVID-19 has contributed significantly to the growth of the company last FY, it is expected that its growth will continue even as things return to normal. For example, blended learning that combines both online and offline content delivery will be a new norm. Considering the size of total addressable market, not only in India but across the world, there is enough head room for a nascent company like Byju’s to grow. Specifically, with technology in education still being in quite primitive form, continued R&D efforts from Byju’s could result in breakthroughs that would catapult its growth to a different level.
In preparation for that growth, Byju’s is also investing heavily in recruiting and training teachers in an effort to seamlessly merge offline and online learning experience for students and allow for a faster scale up. The company also plans to launch content in regional languages to extend the reach of learning app.
As not only students demand control over their learning process, but working professionals also lean towards continued learning, there is a bright future for edtech firms such as Byju’s that can create personalized content for its users.
[1] https://www.livemint.com/news/india/we-want-to-define-the-future-of-learning-byju-raveendran 11611846479742.html
[2] https://www.livemint.com/education/news/how-students-will-plan-their-own-lessons-1550167748798.html
It is amazing to see how people are starting to get used to study in a digital format due to the pandemic. I personally feel that whether these online education companies will survive or not would depend on whether they would be able to somehow collaborate with actual schools. When students are back in school physically, most of their time would be spent at school and they would probably spend less time studying at home. This means that if the company only try to get individual customers, then it is likely that many of them would just stop using the product. So, it seems very important that the company build a good relationship with schools so that they can potentially sell their products to these schools. By doing so, it will be able to capture more value and may even be able to provide better products for free for individual customers.