How Byju's learnt its way into 'Deccacon' club through the pandemic

Byju Raveendran leveraged the lockdown and related restrictions to strengthen and expand his edtech company into the 'Deccacon' club

When the Covid-19 pandemic forced India to ban international flights in March last year, Byju Raveendran, founder and CEO of one of India’s most celebrated startups, Byju’s, was in New York. He was there because his father was undergoing a critical surgery. The surgery went well but the travel ban meant that it was almost four months before Raveendran and his family could return to India.

For the 40-year-old, managing his business remotely from the US underlined the opportunities for his 10-year-old ed-tech firm, the world’s largest, from the extended closure of educational institutions as a result of the pandemic. Still, the task ahead of Byju’s was enormous given that it was used by hundreds and thousands of students every day. The lockdown and other pandemic-related restrictions meant that traffic to the site increased exponentially in a short time and the company had to ensure it had the infrastructure to support to unexpected expansion.
 

Raveendran made some critical decisions at this time. First, the edtech firm committed to offer its app free during the lockdown and for some time beyond. Second, it decided to get into live-tutoring with the launch of “Byju’s Classes”, the intentions being to offer the benefits of personalised after-school tuition classes by some of the country’s best teachers.
 

It was also during this time that Byju’s announced its most strategic inorganic bet by deciding to acquire WhiteHatJr, a platform that provides online coding classes to schoolchildren. The unicorn firm committed around $300 million for this purchase, a calculated bet given the pandemic-related chaos to businesses all round.
 

It speaks volumes for its reputation that the company also closed a funding round from Mary Meeker’s Bond Capital for an undisclosed amount, which catapulted Byju’s into the “Deccacon” club — the term for start-ups that are valued at over $10 billion.
 

“It was certainly a period of hectic activities, and whether from hospital or hotel room, I participated in all those through video conferencing and calls,” Raveendran recalls.
 

The massive shift to digital operations, including remote working, he believes, is going to stay for quite some time, creating newer challenges and opportunities for everyone. “I am very comfortable doing everything remotely,” says the promoter who started out offering face-to-face coaching classes before making Byju’s digital. “In fact, for me, this is a more productive chain because people on the other side are also willing to negotiate online as well. We have closed acquisitions like this and we have closed investments like this. So, it is very, very efficient,” he says.
 

The past eight months and more have certainly been extremely productive for the Bengaluru-based company. By Raveendran’s own reckoning, the firm might have taken several years to achieve the kind of growth it achieved in the initial two months after the nationwide lockdown was imposed in late March. “We are fortunate to be in a sector that has positive relevance during this time. What would have taken us, say, another five years to achieve, the pandemic has enabled us to skip by a few years,” he points out.

Byju’s is today valued over $12 billion (after the $200 million investment by private equity players BlackRock and T Rowe Price last November). Since March, it has added over 25 million new students on its platform. The app also claims to have over 70 million registered students and 4.5 million annual paid subscribers, according to the latest quoted figures. In terms of financials, the company is learnt to have hit an annual revenue run rate of Rs 6,000 crore ($802 million), a substantial rise from Rs 2,800 crore it reported in FY20 (the run rate refers to a company’s financial performance based on using current financial information as a predictor of future performance).

“Byju’s is the role model for all young entrepreneurs on how to build the company and Raveendran has done so without wasting investors’ capital,” says T V Mohandas Pai, venture capitalist and chairman of Manipal Global Education and former senior Infosys executive. “An extraordinary person and one of the greatest entrepreneurs of new India with a deep understanding of the business, he has built a business that can scale up tremendously. He understands the nuances of raising capital, and he has been extremely successful positioning his venture as the world’s largest edtech company,” he adds.
 

As the world moves to a new normal, Raveendran clearly knows that the learning space is going to be a blended one with a mix of physical and online learning. The pandemic has converted parents who used to believe that the online platform can be better utilised for entertainment and games than learning, and that subjects such as math can be learnt best in a physical environment. Raveendran has already spotted some under-penetrated opportunities ahead of him to focus and capitalise on — learning hobbies using online platforms, for instance, and preparations for competitive examinations (also known as test prep).
 

“These are still early days in terms of using technology for making an intervention in the education space. So we are nowhere close to saturation and you will see a lot more companies coming up, which will help the sector grow,” he says. As far as Byju’s is concerned, says Raveendran, while “we were more or less focused on helping students to learn better at home, now we will expand that offering to help them learn better outside school.”