Byju’s has raised around $500 million in a new round of funding led by US-based private equity firm Silver Lake. The investment – in which existing investors Tiger Global, General Atlantic and Owl Ventures also participated – values the Edtech player at $10.8 billion.
So far, in 2020, Byju’s pickings, over five fund-raises, are about $1 billion; in all, investors have now infused close to $2 billion in the Bengaluru-headquartered company whose revenues have grown at a compounded 125% over the past three years to approximately $400 million.
Experts point out Edtech is growing on the back of changes in the approach to education and the rapid rise in the use of smart phones. It supplements school education and given how children have been confined to their homes, due to the pandemic, there has been a surge in subscriptions. Of the three broad categories – K-12 supplementary teaching for grades 1-12, test-preparation and higher education – analysts at HSBC reckon K12 offers the most potential. “K-12 is unsurprisingly the biggest opportunity and we think the market can grow up to $5bn in five-seven years. Test-prep, which is higher education & government examinations could be a $1.5 billion opportunity over a similar time frame,” Yogesh Aggarwal and AbhishekPathak wrote in a recent report. Byju’s currently has over 64 million registered users, of whom 4.2 million are paying subscribers. The renewal rate is approximately 85%.
Other Edtech players, too, have been attracting investments. Last week, rival Unacademy raised $150 million in a round led by SoftBank at a valuation of $1.45 billion. Earlier, Chan Zuckerberg Initiative, which backed Byju’s, participated in a $113-million funding round for Eruditus. In July, US-based Coatue led a $100-million investment in Vedantu.
