BYJU’S expects big jump in profit to $150 million in FY2021

Sangeetha Chengappa Bengaluru | Updated on September 28, 2020 Published on September 28, 2020

BYJU’S founder and CEO Byju Raveendran

Edtech start-up scouting for acquisitions; planning to go in for US listing

India’s most-valued edtech company BYJU’S, which turned profitable two years ago, expects a big jump in net profit to around $150 million this fiscal as more students move to online classes because of the pandemic.

BYJU’S founder and CEO Byju Raveendran told BusinessLine that the start-up has decided to acquire a few more edtech companies to enhance its portfolio. The start-up valued at $11.1 billion also plans to go in for a US listing ahead of the Indian one as it believes it will get better valuation there.

Also read: BlackRock, Sands Capital lead $300-million investment in BYJU’S

BYJU’S has so far acquired seven companies including Vidyartha, Tutorvista and Edurite in 2017, Math Adventures in 2018, Osmo in 2019, WhiteHat Jr and LabInApp in 2020. It is the first edtech start-up to cross $2 billion in investments from as many as 17 rounds from 21 investors.

“Most of the funds that we have raised until now is getting utilised for inorganic growth and international expansion. We have made two significant acquisitions till now; the rest were acquired for their teams and platforms,” Raveendran said. The international scale-up will happen mostly through Osmo and WhiteHat Jr, which the company bought for $120 million and $300 million, respectively.

Growth pillars

“For growth we have always looked at three strong pillars – adding more grades (we have full coverage from age 4-17 years today), more subjects and more markets. We have good coverage in the first pillar. WhiteHat offers the other two pillars – it offers coding as a subject and access to the international market. WhiteHat is the second largest edtech company in India in terms of revenue at close to $200 million in revenue run rate. Osmo gave us a very strong offline to online platform. Because of Osmo we didn’t start with zero revenue when we went to the US. Osmo is expected to do more than $100 million in revenue in the US this year,” he said

Also read: BYJU’S acquires Unitus-funded edtech start-up LabInApp

Pointing out that WhiteHat Jr has 100 per cent women teachers in India, he said: “There is an opportunity in creating teachers for this world just like we have created software engineers for this world. I’ve read somewhere that the workforce comprises only 23 per cent women. They are faced with multiple challenges on the work front. There is an opportunity to create high quality, high paying teaching jobs at scale. I am very bullish about scaling that model in addition to continued growth in our core model.”

Paid user base

Since the lockdown, BYJU’S has added over 25 million new students on its platform. It has a total of 70 million registered students (including the 25 million) and 4.5 million paid users. Forty per cent of the 4.5 million students are from the top 10 cities and 30 per cent of its user base are from the top 100 towns in India.

“With the addition of regional languages, we expect this user base to go deeper. We have Hindi, Marathi and all the South Indian languages and are in the process of adding all the important languages over the next six months” said Raveendran.

IPO timelines

On being queried about filing for an IPO since BYJU’S has been profitable from FY 2019, he said, “That was a very small profit margin, the real profit is happening in this current fiscal year where we will generate $140-150 million. Since our business fundamentals are very strong there is an opportunity to file for an IPO in the next 24-36 months. We will have the option of listing in India as well as in the US.

“With the current regulatory changes happening it will become easy for us to list in the US. It’s a big aspiration to create a large public company, but we have time for that, because we don’t need to file for IPO to give exits to our investors.”

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Published on September 28, 2020
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