Covid-19 impact: Edtech firm Byju's nears $1-billion revenue milestone

After earning the Decacorn status (start-ups that are valued at more than $10 billion) in late June, home-grown edtech firm Byju’s is now inching towards the $1-billion revenue milestone. Though that milestone may not be reached in FY21, Byju’s is certainly within kissing distance of it. 

According to founder and CEO Byju Raveendran, the Bengaluru-based company has already hit a revenue run rate of Rs 6,000 crore ($802 million) on the basis of its revenues in July. And this does not include the revenues that are expected to come through its recent acquisitions.

“We did more than Rs 500 crore last month from our core business in India. I am not including the acquisitions here. That means, we are on target to at least double the revenue, if not more,” Raveendran told Business Standard.

In FY20, the company posted a revenue of Rs 2,800 crore ($370 million), a 100 per cent growth over the previous fiscal.

While the Covid-19 pandemic has certainly driven more students towards online learning, Raveendran said the company expects to grow faster this year also because it has added more products and offerings. “Before the crisis, we had 40 million free users who were acquired over four years. But in the last four months alone, we got more than 20 million free users. This shows how more and more students are trying out online learning,” he said.

However, Raveendran said the company’s bottom line won’t grow at the same pace as its revenue since it needs to pump in cash for its expansion plans, which includes launching new products and foraying into new markets. Byju’s has not disclosed its profit numbers for FY20, though in the fiscal ended March 31, 2019, its profit stood at Rs 20.16 crore.

“This year (FY20), we have made slightly more profit than last year. That’s because we are trying to find the right balance between high growth and profitability. We are also entering new markets and investing in creating newer markets and segments,” said Raveendran. “Otherwise, the profits can be significantly higher because with every passing year we have a large renewal base – the customers whom we acquire without spending any money.”

Last week, BYJU’s announced that it would acquire WhiteHatJr, an online platform that teaches coding to school students, for $300 million. This is the company’s biggest acquisition so far. The uniqueness of WhiteHatJr, Raveendran pointed out, is that its business model has universal appeal and has been almost equally successful in India and the US. 

WhiteHatJr has grown almost 100 per cent every month in the US over the last four months, hitting a revenue run rate of $150 million overall. With BYJU’s as its backer, the company now plans to enter a few more markets, including Australia and some European countries. “But the US is expected to be a big market for WhitHatJr, going forward,” Raveendran added.

However, BYJU’s already had a presence in the US through Osmo, a Silicon Valley-based educational gaming startup, which it bought for $120 million in January last year. In FY21, Osmo is expected to clock a revenue of $120-150 million.

Raveendran said that the company was open to more acquisitions. “If there are companies, people or teams where we can build conviction about the complementary nature of what they are coming out with, you will see us doing a few more acquisitions in the next 2-3 quarters,” he said.

In June, Silicon Valley-based venture capitalist Mary Meeker had invested around $100 million in BYJU’s, valuing the company at $10.5 billion. This made BYJU’s the third most valued startup in the county after Paytm and OYO. There are indications that the company may be in talks to raise a round of $400 million from Russian Billionaire Yuri Milner’s DST Capital.

“There are always investors’ conversations going on. We have raised money not necessarily because we need it for any immediate purpose, as we are not burning cash in India. But having cash or money in the bank sometimes helps you take (acquisition) decisions faster,” said Raveendran.