In ancient times, Indian universities like Taxila and Nalanda attracted international students from afar to their campuses. In the modern era of click and byte learning, India’s edtech companies are carrying forth the ancient torch of being a ‘Vishwa Guru’ by not only offering learning courses within the country, but expanding globally. Increasingly, they are spreading their footprint overseas through acquisitions.
For instance, BYJU’S, the biggest edtech company in India, has made several buys to expand its global presence. Last year, it launched Byju’s Future School, which is a synchronous offering that teaches coding and Math to students in the US in a one- on-one live classes format with teachers from India. Then, the company acquired EPIC and Tynker to further scale up in the market. Additionally, Byju’s offerings are available in other English-speaking countries like the UK, Australia, New Zealand, Canada and it has entered nonEnglish speaking countries like Mexico and Brazil.
Anita Kishore, Chief Strategy Officer, BYJU’S explains, “Acquisitions in the international markets allow us to capitalise on our strengths with homegrown complementary models and build expertise to reach a wider audience.”
She adds, “We are convinced that once we build the right platform, the aspect of online learning is not limited to a specific geography. The fact that we are able to scale in new markets and have a strong product market fit is an early indication of this.”
Apart from BYJU’S, players like Upgrad and Eridutus too have been on a buying spree. The spate of funding received by edtech firms has helped their acquisitive ambitions. In 2021, Indian edtech companies raised a record $5.78 billion across 141 deals in funding, according to analytics firm Tracxn. Talking about the overseas foray of edtech firms, Arjun Upmanyu, Bain and Co, notes that this is a clear sign of the maturity and financial muscle they have in the global edtech market by virtue of their funding, valuation, and war chest they have accumulated. “A few drivers which are underpinning moves to go international include higher affordability and higher average revenue per user as a result, which is key to making unit economics work as these companies scale. Productmarket fit for some of the edtech offerings of these players is better in international markets than in India — Whitehat Jr. , for instance, as an offering is suited well to markets such as the US compared to India, given the pricing and use case,” he added.
According to Upmanyu, in the case of Upgrad and Eruditus, the business model itself is based on tying up with global universities and offering short or long-term courses digitally to students — the student base there is global, and there is no reason to constrain the market to India. Eruditus’ CoFounder and CEO, Ashwin Damera, also noted that even before Eruditus acquired iDTech, 80 per cent of its students were based outside of India. “We started as a company in 2010 thinking that India is going to be the place that we operate, but from 2015 onwards, we have been going global. Today 20 per cent of our students are from India, 35 per cent are in the US, 20 per cent are from Latin America, and the rest is between China, Europe, Asia, Africa, etc. So, it’s a very global market. Today, we are a team of 2,000 people and of this, about 1,000 are based in India, and 1,000 outside of India.”
Upmanyu also points that many of these companies already have a global footprint from a ‘supply’ viewpoint — hence they are already global businesses in that sense — they are now venturing into creating global demand as well.
Damera of Eruditus concurs. “Our focus will continue to grow as we grow organically. Last year, we were about $175 million in revenue, this year it will be closer to $500 million. This year we will also think carefully about inorganic , especially in areas like, can we go deeper into these global markets? Can we build more on the enterprise side and reduce focus on college students?” Twenty per cent of Eruditus’ revenue comes from India business and 80 per cent is global.
In the case of upGrad, the international business contributes 15 per cent to the overall revenue. It is expected to reach a 50:50balance with the mergers and acquisitions planned over the next 12- 18 months. Australian edtech company Global Study Partners was acquired by upGrad for $16 million in 2021. “All our M&A efforts are a result of identifying the right businesses with market knowledge and expertise, with a similar culture fitment. This, in turn, has made the expansion process more efficient, by saving us additional overhead costs in accelerating the organic growth across multiple geographies along with diversification of our products and services,” said Mayank Kumar, CoFounder and MD, upGrad.
Other edtech companies like Cuemath have also been expanding to international markets — though without any acquisition. “Our international business was six per cent of our total business in fi scal year 2020 and in FY 2022, the company’s international business will be 60 per cent of our overall business. So, six has become 60 per cent in the span of two years,” said Vivek Sunder, CEO Cuemath.
He admits that the pandemic has fuelled this growth. “We have high customer retention of 70 per cent. Our international retention is 15 points higher than our Indian retention,” he says.
Amit Ratanpal, Founder and MD, BLinC Invest, adds that acquisition sprees by local edtech companies are in line with the broader trend of local unicorns stepping up investments in international startups to integrate and cross sell their offerings, and will gain further momentum as local edtech startups continue to enjoy investors’ attention after China’s crackdown on domestic edtech firms in the previous year. “Further, new age skilling and higher education will continue to grow, driven by increasing acceptance by Corporate India. As the industry witnesses’ consolidation across sectors, the increased pricing for such courses, targeted towards value-conscious users, will continue to accelerate global expansion, creating innovative learning solutions and unique pedagogy,” said Ratanpal.
With a large domestic market, ample funding and hunger for global growth, Indian players have an opportunity to emerge as behemoths in this space.
(With additional inputs from Isha Rautela)