From teaching about 2,000 Common Aptitude Test (CAT) aspirants in auditoriums in 2008 to conducting math workshops for over 20,000 K-12 (kindergarten to class 12) students in stadiums in 2014, to having about 2 lakh paid users on a mobile device, Byju’s has grown from being a regular coaching class for IIM aspirants to a personalised mobile learning app for school students that has been downloaded more than 5 million times.
In just about six to seven years, Bengaluru-based Byju’s has managed to garner more students than any other offline coaching class; a scale they might have achieved partly because of their online model. “Our videos [each 15-20 minutes long] have a combination of the best teachers visualising and contextualising everything they teach with the help of an in-house content and media team,” says founder and CEO Byju Raveendran, 36, who started taking CAT coaching classes in 2007; later in 2011, he started Think & Learn Pvt Ltd, the parent company of Byju’s.
Byju's raises $50 million from Chan Zuckerberg Initiative, Sequoia and others
As an example, he explains that in a video about Pythagoras’s theorem, a teacher, when he talks about a triangle and moves his hand in the air to draw one, a line would follow his finger with the help of visual effects to show the shape on the screen. “We are not a pure ‘ed-tech’ company. I would like to place ourselves as an ed-media-tech company,” he adds. “It takes a lot of computer graphic artists to put together the brilliant video tutorials that we produce.”
Byju’s continues to have actual classrooms that incorporate online learning (these generate about 10 percent of its total revenues), while the learning app (launched in August 2015), with video lessons and interactive content, addresses the world’s largest market for the K-12 segment.
In FY16, the education market in India was worth about $100 billion and is expected to reach $116.4 billion in FY17. Currently, higher education constitutes 59.7 percent of the market, school education 38.1 percent, pre-school segment 1.6 percent, and technology and multi-media the remaining 0.6 percent, according to a study compiled by the India Brand Equity Foundation which was published in January 2016.
Byju’s was valued at Rs 2,500 crore when venture capital firm Sequoia and Belgian investment firm Sofina invested about $75 million in March this year during Series C funding (the largest for an ed-tech startup); after this, their stake in Byju’s stands at 26 percent while Raveendran’s is at over 50 percent. The Person Behind It
Byju Raveendran, born in Kerala to parents who were teachers from Azhikode village in Kannur district, was popular for playing cricket and football. His sleepy village did not expect him to crack a 100 percentile score in CAT, the entrance examination for the Indian Institute of Management, which he took in 2003. He did not take admission, though.
Instead, he went on to work as a service engineer with a UK-based shipping company, Pan Ocean; during a break, he came down to Bengaluru to spend some time with his friends who were all wired up to crack CAT. “I taught them a few basic concepts of science and math, gave them a few tips to crack an entrance test that people took so seriously,” says Raveendran. They all did well, and the word spread. He took the CAT again, and scored a 100 percentile again. Soon, more friends came asking him to help them. That was when he decided to start Byju’s in 2007.
Within no time, he was conducting coaching classes full-time in Bengaluru; he grew it to a level where he started delivering lectures in large stadiums; he even started tapping distance learning through V-SAT videos.
Today, many of his employees in senior management roles are his former students. His wife, Divya Gokulnath, who is on the board of the company, was also his student.Why It Is a Gem
Early on, when teaching a class overflowing with students at Manipal University in 2013, Raveendran caught the attention of Dr Ranjan Pai, CEO and MD of Manipal Global. He, along with Chairman Mohandas Pai, bought a 26 percent stake in the company in 2014 (they have now partly exited the company). As it grew, Byju’s added more investors. The company’s learning app is adding about 30,000 new annually paid up users every month. The app is already profitable, the company claims. Byju’s revenues for FY16 stood at Rs 120 crore, showing growth in FY17 with revenues of Rs 76 crore in the April-June quarter and a profit of Rs 15 crore.
GV Ravishankar, managing director, Sequoia Capital India Advisors, cites Raveendran’s “use of technology to improve the education outcomes of students in India, his extremely well-crafted go-to-market strategy that allows for scale and, above all, a core team that has high commitment and passion towards democratising access to education in this country” as factors making Byju’s one of the largest ed-tech companies in India and “we believe there is a chance to take the model global in the next few years”.
Byju’s value proposition is that it addresses the biggest gap in the Indian education sector: Access to good quality. Its app-based video delivery model is a scalable solution to bring the best teachers to every student. Risks and Challenges
As students are still getting used to newer methods of learning, Byju’s freemium model works well. Anybody can download the app for free and use it for 15 days, after which the student can subscribe for more advanced levels. The free version of the app comes with all videos that teach some concepts. But if you want to learn more—and Raveendran claims that their model aims to develop an interest in learning—you have to pay. That is where the challenge lies: The cost of accessing the complete learning programme with videos and adapative learning modules of a particular class is Rs 10,000.
Also, Byju’s is looking to raise about $50 million for overseas expansion into all English-speaking countries. While the company is in talks with a few investors, it is yet to find the right partner. The company already has a sizeable student base in the Middle East; it is also in advanced talks with an education technology company in the US for acquisition. The size of the acquisition is pegged at $25 million. “This should give us a head start in the US markets,” Raveendran says. “The challenge I face here is to find a partner who will help me with the international distribution of this model. We are not just looking at partners from a financial perspective, but those with access to good technology for distribution.”
(This story appears in the 16 September, 2016 issue of Forbes India. You can buy our tablet version from Magzter.com. To visit our Archives, click here.)