Catching them young

Byju's, a leader in ed tech, is doubling revenue year-on-year

“Today, illiterate people are not those who cannot read and write, but those who can’t learn, unlearn and then relearn,” says Byju Raveendran, co-founder and chief executive of India’s largest education technology start-up, Byju’s. This 21st century reality is what drives him to train India’s next generation in becoming self-learners or life-long learners, and he’s doing it by making learning fun again.
 
Started as a test preparation business in back in 2007, Byju’s has since transformed itself into a digital teaching tool for students in classes 4-12, apart from helping them prepare for several entrance exams. Over 15 million users have downloaded its app, of whom 900,000 are paying subscribers. Importantly, says Raveendran, students spend a daily average of 53 minutes learning on the app.

 
This scale probably makes Byju’s one of the world’s leading ed-tech platforms for primary and secondary education. It has also helped it attract global investors such as the Chan Zuckerberg Initiative, the philanthropic fund of Facebook founder Mark Zuckerberg and his wife Priscilla Chan, which led a $50 million investment round in the company in September 2016. Since then, Byju’s has also raised money from Tencent, China’s leading Internet company.
 

“Our model is creating a new segment, it’s simply not a cut-copy-paste of some model from the US or China. Even countries which are way ahead of us in digital and physical infrastructure haven’t created something like this, which is why it’s very exciting from global investors’ point of view,” adds Raveendran.

 
While several companies in the West have been transforming learning at the university level through massive open online courses, the market for primary and secondary learning is largely unserved. This segment is the largest in terms of the sheer number of students in schools, but also among the most important, since it teaches children basic concepts that will shape their learning through life.
 
The global opportunity makes Byju’s an attractive proposition, but for now the company plans to stay rooted in solving India’s education problem. Over 260 million students are enrolled in schools in India, more than even China, making it the largest opportunity of its kind in the world. This is also where Byju’s differs from its e-commerce peers who are vying to serve a market that doesn’t yet exist, whereas all that the ed tech firm needs to do is drive itself deeper as digital penetration improves in the country. Three-fourths of its users already come from outside India’s metros, so it’s a promising start.

 
The company’s revenues grew by over 100 per cent to Rs 2.4 billion in 2016-17, compared to Rs 1.1 billion in 2015-16. This growth is expected to continue for at least the next five years, given that Byju’s enjoys a high renewal rate of 85 per cent, meaning that most of the students who sign up will continue to pay for the service until they complete their secondary education. At least that’s the theory, and it has been proved right since the launch of the mobile app three years ago.
 
“Since we launched the app our revenues have been growing at 100 per cent and this year we’re expecting to grow more than that. Because the renewal base is so big and will keep increasing year-on-year, we don’t have to add double the number of students to grow by 100 per cent,” adds Raveendran. “We’ve still been adding double the number of students each year, though.”

 
Byju’s expects 2017-18 revenues to exceed Rs 5 billion, and to comfortably cross the Rs 10-12 billion mark in 2018-19. The company says it’s already making profits, which will begin to contribute to growth as the penetration of its app used by students in India increases. Currently, 0.35 per cent of India’s student base subscribes to Byju’s paid service, but Raveendran hopes to haul that up to five per cent in the next few years.