Why ed-tech startup Byju’s will build, not buy, for its global expansion
Ed-tech startup Byju’s plans to start offering its services outside India from September, as it enters its next growth phase after raising around $200 million (around Rs 1,303 crore) till date from a clutch of domestic and foreign investors.
Following in the footsteps of Zomato, Practo and Ola, the Bengaluru-based company will launch its app for English-speaking international markets in later this year, founder and chief executive Byju Raveendran told TechCircle.
“We will roll out in these markets and test the acceptance of the product before spending money on marketing in a particular market. With almost a million paid subscribers paying upwards of Rs 10,000, we will generate a lot of cash surplus from India and our last funding can support our global ambitions," he said.
While Raveendran had repeatedly said that the company will look at acquisitions for growth in international markets, he said that Byju's could not find many good companies. It will still find partners for distribution in these markets like the US, UK, Australia, Canada, Malaysia, Singapore among the main markets.
“We had the option of buy versus build strategy. We found that what we want to have, has to be built from inside. We already have a strong media and content production team. We have brought down famous teachers from across the world to do this in Bengaluru," he said.
Byju’s had acquired online education company TutorVista Global Pvt. Ltd from British media and publishing group Pearson Plc in July 2017. But Raveendran said that the main reason behind the acquisition was to buy Edurite Technologies Pvt. Ltd, a provider of technology solutions to the education sector, which TutorVista had acquired in 2007. “TutorVista is a service-based model and we are a product-led company," he said.
Byju's began developing its technology-driven education format only in 2011 and launched the app in 2015. Since then, the company has more than 12 million registered users and app downloads and has now grown from a 250-people startup to a 2000-strong company. Around 97% of its revenue now comes from online channels as it is gradually phasing out its legacy classroom teaching.
"The basics of science and mathematics remain the same everywhere, and hence, the content of the videos will largely remain relevant across the world. We only need to change the teachers/actors and the accents in voice-overs," said Raveendran. "Our ambition is always to be a global company that will change learning," he added.
Byju's already generates 15% of its revenue from overseas users. These are mostly students of Indian origin in foreign countries or students studying in Indian schools abroad.
The ed-tech firm spent almost Rs 165 crore this financial year to develop content for the global market.
Think and Learn Pvt. Ltd, which runs Byju’s, last raised funds in July 2017 from Tencent, which reportedly put in about $35 million (Rs 225 crore) into the startup. The deal valued Byju’s at around $776 million (Rs 5,000 crore).
Besides Tencent, the ed-tech startup counts the Chan Zuckerberg Initiative, Belgian family office Verlinvest and the World Bank’s private sector arm, the International Finance Corporation, among its investors.
"We have most of the money from the last fundraising in the bank," said Raveendran. He is looking to clock revenues of around Rs 550 crore for the financial year 2017-18. It had previously reported revenues of Rs 240 crore in 2016-17, Rs 110 crore in 2015-16, Rs 45 crore in 2014-15 and Rs 20 crore in 2013-14.