Note to readers: Hello world is a program developers run to check if a newly installed programming language is working alright. Startups and tech companies are continuously launching new software to run the real world. This column will attempt to be the "Hello World" for the real world, celebrating success when it's due and highlighting errors when needed.
Until two years ago, Karan Bajaj was not a well-known name in India’s startup ecosystem echo chamber. The bespectacled man in his early 40s, living in New York was better known as an author and the chief executive of Discovery Networks India. Bajaj, the son of an army man was raised in India, he studied engineering in BITS Mesra and then management at IIM Bangalore and has spent his working life in the United States.
Last week, news broke that his startup Whitehat Jr was sold to Byju’s in a $300 million all-cash deal. Let’s take a couple of minutes to marvel at this feat before we move on to the point I want to make in this column.
First, the company — barely 20 months old — was valued at over Rs 2,250 crore if you go by prevailing exchange rates. That’s about Rs 400 crore more than the combined market capitalization of NIIT Ltd and Aptech Ltd, two of India’s oldest and largest companies that taught kids of our generation coding.
Second, the company has raised only $11 million from venture capitalists. If you look at all the new-fangled online learning companies — the “edtech” category — this is an incredibly little amount of money raised. For instance, Unacademy has raised close to $200 million. Byju’s has raised $1.5 billion. Toppr has raised some $112 million. That is, Whitehat Jr seems like a capital-efficient company on steroids.
The ‘why now’ of the deal is easy to speculate. The pandemic has forced millions of children to go online to learn and the new national education policy places significant emphasis on digital learning. Education is a big business in India and parents are happy to spend money on getting their children a ‘decent’ education. Here’s a fast-growing company with a savvy marketing engine and great unit economics in a hot sector where larger competitors are steeped in an intense land grab. If one doesn’t acquire the company, another might.
Also Read: Remember GMVs? Startups now flaunt ARR—an equally fuzzy, misleading metric
If you are reading this in the morning, don’t forget to take that afternoon nap. I mean it.
Jayadevan PK is a former technology journalist and recovering startup founder. He now works with Freshworks Inc as an evangelist, focusing on efforts around brand building. He’s also a commissioned author at HarperCollins.
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