According to a study by Global Industry Analysts, the global private tutoring market is projected to surpass $102.8 billion by 2018. The Indian private coaching industry was estimated to be worth $45 billion in 2015 and expected to reach $70 billion by 2017. The BYJU’s learning app from Think and Learn Pvt Ltd is one of the most heavily funded EdTech startups in this market.
Think and Learn Pvt Ltd or better known as BYJU’s was founded in 2011 by Byju Raveendran in Bangalore. Around 2007, Byju helped some of his friends prepare for the Common Admission Test (CAT), which is the entrance test for India’s best management institutes. He then started conducting CAT preparation workshops on weekends. From a classroom of 40 students, he was soon booking auditoriums for 1,200 students. Soon, Byju replicated this successful model to eight other cities including Chennai, Mumbai, and Pune.
By 2009, some of his best students joined him to scale up the content and the business. In 2011, the company was founded and it started offering the sessions through the video format. In 2014, it launched a tablet learning program for competitive exams and grades 8-12.
In 2015, it launched the BYJU’S learning app and within three months, over 2 million children were using it. BYJU’s creates personalized learning programs for students based on their proficiency levels and capabilities. It generates slick, high quality videos for the K 12 segment that are developed by over 500 people in the Research and Development team.
Today, BYJU’s offers learning programs for class 4-12 and test preparation for competitive exams like JEE, AIPMT, CAT, IAS, GRE, & GMAT. It has over 8 million students on its platform, 400,000 annual paying subscribers, and a 90% renewal rate.
BYJU’s follows a freemium model. The price for the program for each class starts from Rs 23,000 ($360). The price for competitive exams can vary from Rs 15,000 ($235) to Rs 60,000 ($940). The K 12 vertical accounts for about 90% of the total revenue.
BYJU’s recorded revenue of about Rs260 crore ($40 million) in FY 2017, up 136% from Rs 115 crore ($23.5 million). Its team size has grown to 1000. It turned profitable in the April-June quarter of 2017.
BYJU’s has raised over $204 million in funding so far from investors including Sequoia Capital, Chan Zuckerberg Initiative, Sofina, Tencent Holdings, IFC Venture Capital Group, Aarin Capital, Lightspeed Venture Partners, Times Internet, and Verlinvest. It raised $160 million in 2016 alone. In March 2017, it raised $30 million at a valuation of $600 million.
The company says about 15% of its students already come from outside India and it plans to use the funds to expand its footprint internationally. It plans to acquire US-based gaming and learning startups targeting lower grades. It has already made two acquisitions this year. In July 2017, BYJU’S acquired TutorVista and Edurite from Pearson to expand its international reach and create a diverse product portfolio. It acquired career guidance and academic profile builder Vidyartha in January.
Competition is, however, stiff for BYJU’s. Private coaching institutes are plenty in every Indian city apart from local, home tutors. Some of the leading private coaching institutes are Delhi-based Aakash Tutorials and Kota-based Bansal Classes.
Apart from these, its EdTech competitors include iEmbibe, Toppr, Avagmah, iProf, Meritnation, and Simplilearn.
It will also need to look out for cannibalization from California-based Khan Academy, which has partnered with Tata Trusts to create specialized, free online content for India. It is a nonprofit founded in 2006 that has also partnered with institutions like NASA, The Museum of Modern Art, The California Academy of Sciences, and MIT to offer specialized content.
The best thing about this company is that it has already turned profitable. Against the backdrop of heavily funded, unprofitable companies in the industry, this very fact is a lung full of fresh air!