Case Study: BYJU’S — World’s highest valued Edtech company

BYJU’s is a Bengaluru based educational technology and online tutoring firm founded in 2011 by Mr. Byju Raveendran. BYJU’s offers highly personalized and effective learning programs for classes 1 to 12, and aspirants of competitive exams like JEE, CAT, UPSC, etc.

It was originally developed by Think and Learn Pvt. Ltd. in 2011. In August 2015, after 4 years of developments, the firm launched BYJU’S The Learning App. The app was downloaded by more than 2 million students within the first 3 months since its launch In 2017, Think and Learn launched BYJU’S Math App for kids and BYJU’S Parent Connect app to help parents track their child’s learning course.] BYJU’S app also became a business case at Harvard Business School. By 2018, it had 15 million users and 900,000 paid users.

Mission

To help children fall in love with learning

Milestones

Education in India is a big obsession in every household, and the company tapped into the nerve at a time when coaching institutes were booming.

• High Retention Rate — The company boasts an astounding retention rate of 85% annually, meaning it retains 85 out of every 100 customers who have used the services.
• Valuation — Byju’s became the highest valued EdTech company in the world, leading companies like Coursera, Chegg, and Pluralsight, with a valuation of $5.4 Billion as of March 2019
• Users — Byju’s has a total of 35 million registered users out of which 2.4 million are paid subscribers as of May 2019 (Twice as many as 2018).
• Revenue — In 2018 the company reported annual revenue of 490 crores, which almost tripled in 2019, 1430 crores.
• Sponsoring Indian team — In July 2019 BYJU’S acquired Indian cricket team Jersey rights from Oppo.

Business Model

The importance of education is of prime importance to any parent in the whole world, but in India, it goes up a notch higher. ‘Kota’ a small town in Rajasthan is a good example, which caters to 1.5 million competitive exam aspirants every year. BYJU’s attempts to bring that experience at home, including regular monitoring by the parents, while providing interactive ways to the student as against the traditional pen and paper. The student is able to carry all his study material within their palm whenever and wherever they want. Byju’s has clearly tapped into one of the highest revenue-generating industry with the innovation that intends to genuinely benefit the students.

Byju’s clearly has a vision that has been appreciated by its customers. With a strong revenue model and lucrative sales formula, it has grown into the leading Edtech company in the world.

Challenges

A hard pitch — It doesn’t seem an absurd idea to study from an app these days, on the contrary, almost everyone prefers it this way. But back when Byju’s was taking off, it was actually a tough sell to convince parents to let their child give up their traditional books and notes to study digitally for the most important exams of their lives.

The Employee — For a company which tripled its profits in a year, you can bet that its sales team is giving everything it has got and then some. It often requires squeezing as much as you can from every employee you have. It is a high-pressure job especially for the sales department, but the company compensates well for it with bonuses.

Refund controversy — Byju’s also provides a complete package that includes a learning tablet as with the study material. According to the company policy, you can return the product within 10–15 days and get a refund. But a lot of customers complained that the company’s response is poor, and they refuse the refund without any reason. There has been a considerable amount of similar complaints throughout the country. Although the company insists that it has addressed all the complaints and is continuously working on its shortcomings.

Funding History

2013–14: BYJU’S received seed funding from Aarin Capital in 2013.

2018–19: BYJU’S has secured nearly $785 million in funding from investors, including Sequoia Capital India, Chan Zuckerberg Initiative (CZI), Tencent, Sofina, Lightspeed Venture Partners, Brussels-based family office Verlinvest, development finance institution IFC, Napsters Ventures, CPPIB, and General Atlantic. BYJU’S was the first company in Asia to receive an investment from Chan-Zuckerberg Initiative.