The Indian Unicorn in the Education sector — Byju’s
Byju’s app is India’s heavy-weight champion in ed-tech space with a valuation of almost $10 billion and funded by giants like Chan-Zuckerberg Initiative, not to mention the immense branding potential the firm have with Shah Rukh Khan on board as well the visibility it gained by acquiring the sponsorship rights for the Indian Cricket team jersey. Now the story of Byju Raveendran is not as glamourous as those of other tech start-up founders- there isn’t any eureka moment, an IIT/IIM power punch or even an on-hand experience with big tech. Instead, it’s a long story of hard work and passion which turned into a successful business venture.
Byju Raveendran was born in the coastal town of Azhikode in Kerala. Both his parents were teachers and he was known as a maths whiz who used to tutor high school kids. Entrepreneurship wasn’t exactly on his mind when he went to work in a Singapore firm after graduating as a Mechanical Engineer. During his trips back home he used to help his friends ace the highly competitive entrance exams for IIMs — the premier Indian Business Schools, popularly known as CAT. He himself attempted the exams twice for fun, scoring in the top 1 percentage which convinced him to take up the prep as a full-time venture. In 2005, Raveendran quit his job and returned to India to teach business-school applicants full-time and started CAT prep class with around 40 students. Within 6 months he would be giving classes in packed auditoriums with 1000+ students, travelling across 9 cities back to back.
In 2011 he founded Think and Learn, the holding company of Byju’s app, which focused exclusively on management entrances and civil service exams. Soon they were delivering coaching for many different entrance tests through tablets that would be sent to students pre-loaded with course material and in 2012 it entered both Deloitte Technology Fast 50 India and Deloitte Technology Fast 500 Asia Pacific ratings. The real game-changer was in 2015 when the company launched the Byju’s app which had content for K-12 students since Raveendran believed that a lot of his management aspirants were lacking in the fundamentals and hence wanted to skill up from the school level. The firm ran on the brand tag of “The Learning app” with Raveendran appearing on a multitude of advertisements and was able to get investments from the likes of Ranjan Pai, the chairman of Manipal Group.
Byju’s entry to the online market was well-timed. Post-2016 there has been a revolution in Internet access across India with dirt-cheap prices making online platforms affordable to a large chunk of the population. Again advancements made in the fintech industry ensured Byju’s app would be able to integrate them for easy payment for their services. The app runs on a freemium model with first 15 days free and thereafter a subscription fee of Rs10000 ($130) is needed to be paid. They have an 85% subscription renewal rate with an average screen time of around 71 minutes and have successfully turned profitable in 2018 with a net profit of $2.5 million against an operating revenue of $185 million in 2019. The success of the app is partly attributed to the heavy advertisement the firm has launched which amounts to nearly $40 million in 2019 alone, which included celebrity endorsements cashing in on the 2019 Cricket World Cup. The marketing has definitely given impressive returns, for the app has 2 million annual subscribers with around 33 million downloads.
Now the potential of ed-tech sector in India is immense and ever-growing for the majority of Indian learning systems focus on rote learning with low priority on practical knowledge or application which has resulted in the majority of students finding even middle school maths difficult to solve (ASER 2018). Byju’s app features a non-interactive mode of learning with a heavy focus on animation and graphic visualisation to drive in the concepts. However, Byju’s unique features are the personalised ‘knowledge graph’ which helps users to proceed at their own pace as well as a free counselling session at the doorstep of the student. Moreover, parents can track their kid’s performance using an interactive dashboard which makes it an attractive platform for a middle-class Indian household.
The Covid 19 pandemic has surely brought a new range of opportunity for the app which can leverage its vison of in house learning. But the future road is sure going to be bumpy with the advent of other start-ups like the Chinese backed Vedantu which features a one to one mentoring as well as Unacademy which continues to be a major player in Civil Service exam preparation with plans to venture into more areas. Again international players like Coursera and Udemy which feature industry-approved certificate courses continues to be a favourite among Indian college students and still remains an area where Byju’s has not ventured into. Byju’s also plans to expand into the US, UK, South Africa and other commonwealth markets where it is going to face tough competition from the Bill Gates-backed ‘Khan Academy’ which is a non-profit initiative run by the Indian American MIT engineer turned educator, Sal Khan. However, Byju’s surely is upping the game with more focus on its interactive content and has recently hired over a thousand animators and subject experts to diversify its reach. Byju’s has partnered with Disney to launch a learning app for kids aged 6 to 8 and has acquired Osmo, a Silicon Valley start-up, which uses Computer Vision and AI to create learning games which shows the firm is aiming for a long haul. Now there are ethical considerations to look when huge money is invested in the education sector eyeing profits, but past experience shows content is always the king in the area. Byju Raveendran says he is an educator by passion and entrepreneur by choice and with a continual focus on content creation Byju’s app is here to stay as a major player.
